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Sat, Sep 17, 2005 - Page 12 News List

Microsoft, AOL discuss pact to take on Google, Yahoo


Microsoft Corp and Time Warner Inc have been discussing potential online partnerships that would help the two companies better compete against rivals Google Inc and Yahoo Inc, two people familiar with the talks said.

The two said on Thursday that the discussions have been going on for months and that any possible deal is not imminent.

Microsoft and AOL -- who just two years ago settled an antitrust lawsuit over Microsoft's tactics in the Internet browser market -- are discussing possible collaboration in search technology, online advertising and instant messaging, said the two sources, one of whom is an executive with Time Warner's AOL unit.

The other source, who works closely with Microsoft and has been involved in company discussions on the possible partnership, said the talks have heated up in the last couple weeks but are not advanced.

Both sources spoke on condition of anonymity.

Time Warner spokeswoman Susan Duffy and Microsoft spokesman Jim Desler declined to comment on the talks, which were first reported in Thursday's editions of the New York Post.

The AOL executive said one aspect of the talks originally centered on using Microsoft's new MSN search engine on AOL, replacing AOL's current relationship with Google.

More recently, the executive said, the two companies have been talking about the possibility of deeper relationships, such as collaborating in the market of selling advertising online. This could allow the two companies to benefit from growing interest in search-based advertising, helping them better compete against Google and Yahoo.

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