The Financial Times said both companies had declined comment but cited sources close to them as saying the talks, which it said had collapsed earlier this month, had resumed.

"They are also discussing a looser alliance, although those close to the companies warned it was far from certain that the talks would lead to a deal of any description," the paper said.

While analysts earlier this month saw strategic benefits in such a deal, they said such a move would be expensive for Yahoo! and added that did not see why eBay would have any reason to sell out just as its business is flourishing.

Yahoo!, which has had great success in pulling consumers to its sites with content and commerce, does not have the stature in online auctions that eBay offers.