Yahoo and Microsoft step up Time Warner AOL discussions

Updated at 1:36 p.m. PDT with a report on AOL executives meeting with Microsoft.

Yahoo and Microsoft have both accelerated their respective deal-making talks with Time Warner's AOL, as a proxy fight looms less than three weeks away between Yahoo and investor activist Carl Icahn, according to a source familiar with the discussions.

"The ongoing talks between all the companies have recently picked up," said the source.

That may come as no surprise, given that Yahoo over the weekend rejected a sweetened Microsoft offer to buy just its search assets and the board of directors for the Internet pioneer will be up for grabs when Yahoo and Icahn face off at the August 1 annual shareholders meeting.

Specifics about the types of deals that are currently underway in these two separate discussions and the likelihood of an outcome are not clear.

But previously, talks between Yahoo and AOL reportedly involved discussions of Yahoo acquiring AOL and, then, Time Warner taking an investment in Yahoo.

And as noted in the Silicon Alley Insider last month, a Microsoft buyout of AOL could come sooner than later. In fact, Silicon Alley Insider posted this nugget Tuesday that a team from AOL was in Seattle to talk about a potential deal with the software giant.

And a report in Reuters Tuesday was the first to note talks had "heated up" among the three parties.

[onlyauser]

Yahoo messes up this entire process. Egos before responsibilities to investors has put Yahoo in hot water. This is the reason the Yahoo board needs to go.

Yahoo is done as we know it. Put a fork in it.

[JCPayne]

As per the capital hill discussions about the implications of any so called Google-Yahoo deal it is quite clear that any Yahoo-Microsoft deal wouldn't be in the public's interest either and that should also become blocked.

[NWLB]

Microsoft isn't in the public's interest either and that should also be blocked.

[JCPayne]

HA..... Time Warner take over Yahoo!! HAHAHAHAHAHAHA Talk about a company that lost tons of its own value.........

[josmor]

I think Yahoo is doing fine.
AOL and Yahoo are better than MSFT and Yahoo.
At the end, all of them will have to be together to compete with Google... and that is fine for all of us.

[rootsmusic]

Since Yahoo has settled with Icahn now, is AOL becoming less attractive to Yahoo or would Yahoo's interest in a former AOL CEO joining its board be signaling that it's still attracted?