Report: AOL-MSN Talks Restarted

Once fierce rivals Microsoft and America Online are again at the bargaining table, according to a report Friday in the Wall Street Journal. Sources familiar with the discussions say the main topic revolves around use of the MSN search engine to power searches on

While a report of talks in mid-September indicated an agreement could have also included a merger of the two companies' ad sales units, the WSJ remained vague on any additional topics that were discussed.

A person close to the negotiations said a deal, if any, would happen before the end of the year. Sitting at the table are Time Warner's executive vice president Olaf Olafsson and Microsoft's senior vice president Henry Vigil.


Such a move by MSN may not be part of an endeavor to merge with the nation's largest ISP, but rather part of a larger effort by the company to put pressure on rival Google. The search giant has made several moves this year that have given Microsoft reason to worry, including the hiring of former executive Kai-Fu Lee in July, and the announcement of a partnership with Sun on Tuesday.

A deal could be beneficial to AOL as well. As dial-up at AOL fade away, meanwhile, the company has refocused around its advertising business. And a partnership with MSN could bring in more revenues than AOL's current agreement with Google.

But the door is ostensibly open for a broader deal than just search. Time Warner Chief Richard Parsons recently admitted the company did not have to own AOL completely. Parsons said the company wants "to retain a relationship with AOL that allows us to mine the value."

Microsoft and Time Warner are not commenting on the situation.

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