AOL, Microsoft Close to a Deal?

According to a report in the New York Times today, Time Warner will most likely not sell a stake in AOL or sell the business outright, but will strike a partnership with either Microsoft or Google. A story in the Wall Street Journal (subscription required) names Microsoft as the frontrunner, saying the two are close to a deal.

Google currently provides AOL with its organic and paid search results, and shares revenue generated by the ads with AOL. Microsoft is currently piloting its own paid search listings, and has its own organic search engine, which could replace Google on AOL. Google’s current contract with AOL ends in 2006.

The Times said the deal with Microsoft could include creating a joint advertising sales force with MSN, but that Google would not be interested in such an arrangement.

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