Microsoft talks with AOL over potential deal

As Carl Icahn fights on to put Yahoo in the hands of Microsoft, the folks in Redmond are looking at alternative acquisition targets. Quoting the Wall Street Journal, Bloomberg News reported yesterday afternoon that Microsoft planned to meet with AOL officials later that day.

The meeting was to take place over a "possible combination" of the two companies. Microsoft and AOL hadn't formalized a deal at press time, but they'd allegedly been talking for "several months," and a team from AOL previously traveled to Seattle for talks.

Microsoft isn't the only one contemplating a deal with AOL. We noted back in April that Yahoo and AOL also held talks over a possible deal, in which the former would take control of the latter and then receive an investment from Time Warner plus a 20% stake in the resulting entity. Reuters mentioned yesterday morning that Yahoo was still in negotiations with the rival Internet firm. According to Reuters, Time Warner is scrambling to reach a deal before Yahoo's August 1 shareholder meeting, which could see a Microsoft-friendly board take the reins if Icahn gets his wish.

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