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Newspaper: Microsoft-Time Warner Resume AOL Talks

Time Warner Inc. and Microsoft Corp. have restarted discussions about forming an alliance of their Internet units, America Online and MSN, the Wall Street Journal reported in its Friday editions.

Citing sources with knowledge of the discussions, the newspaper reported that the two companies are focused on ways to combine AOL's Web content with Microsoft's search engine. It isn't clear whether the talks include the possibility of merging AOL's 20.7 million dial-up customers with Microsoft's 2.7 million dial-up customers.

According to the Journal, the two companies originally began discussions earlier this year, but the talks stalled in late summer over issues including technical obstacles and questions about control.

While obstacles remain, negotiations appear to be on a fast track. "If you can't get it done in calendar year 2005, then it's probably not going to happen," the Journal quoted an unnamed source involved in the negotiations as saying. The talks are being headed by Time Warner executive vice president Olaf Olafsson and Microsoft senior vice president Henry P. Vigil, the paper reported.

Time Warner is also courting other suitors, the Journal reported. Neither Time Warner nor Microsoft offered official comment.

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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