Yahoo backs off bidding for AOL stake
Terms of the proposed deal were not to Yahoo's liking. AOL continues talks with Microsoft, Google.
"After we learned what their proposed deal terms were, we passed and we've never looked back," a Yahoo spokeswoman said on Thursday, confirming a report in the Wall Street Journal.
She denied that the company had made an offer for AOL but confirmed that Yahoo Chief Executive Terry Semel met with Time Warner chairman Richard Parsons in October.
The paper, citing a person familiar with the matter, said Time Warner signaled it wasn't interested in the terms Yahoo was willing to offer.
Time Warner is still in talks with Web search engine Google and software giant Microsoft and the Journal said the two companies are neck-and-neck in the talks, citing unnamed sources.
Time Warner is expected to choose one partner with which it will start exclusive negotiations as early as next week, the paper said.
It said an AOL combination with Microsoft is less likely to be a joint venture, as previously expected, and is more likely to be a smaller-scale partnership.
The Journal also reported that Google is willing to buy a minority stake of the AOL unit, including its shrinking dial-up Internet access business. In one scenario, cable company Comcast would join Google in late negotiations for the unit.
Yahoo, Google, Microsoft and Time Warner were not immediately available for comment.