AOL Denies Talks of Acquisition by Microsoft

A rumor first reported by the New York Post sent shockwaves through the industry Friday afternoon. The Post claimed to have the inside track on secret negotiations between America Online and Microsoft discussing the latter's acquisition of the former.

When asked to elaborate on the rumors of a potential buyout, a Microsoft spokesperson immediately rushed to say, "As Microsoft's policy is not to comment on rumors and speculation, we have no information to provide regarding Microsoft's acquisition of AOL," while an AOL spokesperson told BetaNews, "no comment."

America Online has since denied the report.

According to the Post, Time Warner's lawyers have been examining the antitrust issues that would be initiated by Microsoft's attempted acquisition of AOL. The report indicated that a few barriers were found that would undermine the sale of the online business unit.

Microsoft has faced renewed antitrust pressure, this time stemming from the European Union Commission's view that the company is unfairly leveraging its Windows operating system to stifle competing products.

Despite a last ditch effort by CEO Steve Ballmer to settle the matter, the Commission is expected to rule against Microsoft and require the software maker to strip Windows Media Player technology from Windows, along with paying a hefty fine.