aol shows interest in yahoo

US internet company AOL are believed to be taking an interest in Yahoo in a bid to fend of Microsoft.Advisers from Time Warner-owned AOL have held talks with representatives of Yahoo to see if a deal is workable, the Sunday Telegraph reported.

Microsoft has offered to buy Yahoo for more than $40bn (£20.5bn).

But AOL is thought to be keen on being the firm that helps Yahoo avoid falling into Microsoft’s clutches.

Last week Rupert Murdoch’s News Corporation was said to have taken an interest in merging its online interests - which include MySpace - with Yahoo.

Yahoo Reject Microsoft bid

WASHINGTON (AFP) - Internet giant Yahoo’s board has decided to reject Microsoft’s takeover bid, saying its 44.6 billion dollar offer “massively undervalues” Yahoo, the Wall Street Journal reported Saturday Citing an unnamed source familiar with the situation, the Journal said Yahoo’s board also believes the Microsoft offer, at 31 dollars per share, does not account for risks facing Yahoo if it pursues a deal that might be ultimately blocked by government regulators.

“Yahoo’s board believes that Microsoft’s is trying to take advantage of the recent weakness in the company’s share price to ’steal’ the company,” the newspaper said on its website.

“Yahoo’s board appears to be betting that Microsoft doesn’t want to ‘go hostile’ and try to acquire the company against the wishes of management and the board,” it said.

A person familiar with the situation Saturday confirmed to AFP that the Journal report was generally in line with the Yahoo board’s intentions.