AOL, News Corp. Add New Twists to Yahoo's Saga - Page 2

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Microsoft: No Way

Microsoft General Counsel Brad Smith said Yahoo and Google would consolidate more than 90 percent of the search ad market in Google's hands. Herb Kohl, the Democratic head of the U.S. Senate antitrust subcommittee, chimed in to say he was watching Yahoo's deal closely to ensure it does not harm competition.

Microsoft had threatened on Saturday to launch a hostile bid for Yahoo and could lower its offer in about three weeks if it does not get a deal from Yahoo, a Web pioneer which argues it is worth more than Microsoft's $42 billion bid.

Any of the combinations, or another yet to be determined, would fundamentally change the Web. Major players have been circling each other as the first decade of growth in the Internet market has begun to slow dramatically.

The talks with News Corp, which previously had discussed working with Yahoo as a counter to Microsoft's unsolicited bid, are at a sensitive stage, the New York Times said. The Wall Street Journal called those talks "serious."

Microsoft, News Corp, Time Warner, Google and Yahoo all declined to comment on the talks.

Terms of the proposed Microsoft-News Corp union are still being worked out, the New York Times said. News Corp would likely contribute its Fox Interactive Media unit, which owns MySpace, and possibly cash to a partnership with Microsoft as part of a Yahoo acquisition, the newspaper said.