Yahoo and AOL talking again

Yahoo might still make an offer to acquire AOL's advertising business

Yahoo is to continue the talks it started with Time Warner's AOL business earlier this year, according to a fresh wave of media reports.

Rumours surfaced in March that Yahoo might make an offer to acquire AOL's advertising business, and that Time Warner would make investments in Yahoo. This deal could now be back on track, according to reports from Bloomberg.

The acquisition plans, which would increase Yahoo's grip on the search market, first emerged when Jerry Yang, who has just stepped down as Yahoo chief executive, was trying to thwart Microsoft's $44.6bn bid for the company, but before the Google deal was on the cards.

However, with the Google and Microsoft options having collapsed, it appears that Yahoo is back-peddling and trying to restart the AOL deal.

The proposed deal with Google would have seen Yahoo partake in Google's AdSense for Search programme, allowing it to display search ads sold by Google in return for revenue.

But the partnership was called off at the beginning of this month after regulators expressed concerns that the deal would have given the firms too much market dominance.

Yahoo then changed its attitude to a Microsoft buy out, and Yang did his best to encourage a new offer when he spoke at the Web 2.0 Expo in San Francisco two weeks ago.

But Microsoft chief executive Steve Ballmer has since confirmed that Microsoft is no longer interested in buying Yahoo, which has left Yahoo's share price reeling.

Yahoo now faces more uncertainty as Microsoft confirmed that it will hire Yahoo vice president of search Sean Suchter in December.

Microsoft said in a statement that Suchter will join as general manager of the Silicon Valley Search Technology Center to work on Live Search.

In separate news, Yahoo is to partner with T-Mobile in the US to allow users to access Yahoo search under a new T-Mobile web2go service.