Google, AOL partnership rumours highlight Yahoo's desperation

Microsoft's last week ultimatum to Yahoo to "take or leave" the acquisition offer seems to have caused the internet company to vigorously explore other potential partnerships: Google, AOL, News Corp are the three options that are being (re)considered.

Google has already said that it would do whatever is necessary to prevent the deal from going forward; according to the Wall Street Journal, Yahoo could provide advertising space to Google in a short-term partnership that could become something bigger.

Yahoo is also looking to outsource its search ad sales; a decision which could leave it highly vulnerable to Google even if it gives Yahoo a temporary reprieve and some welcome revenues; it is understood that the limited nature of the Yahoo/Google collaboration means that the regulatory bodies will not scrutinise it for now.

But another alliance is reportedly being forged elsewhere which could prove too powerful even for Mighty Google.

Microsoft and News Corp could be mounting a joint bid for Yahoo, probably buying Yahoo's share at a price Yahoo shareholders can't refuse.

A third potential option could be Time Warner's AOL merging with Yahoo with TW getting 20 percent of the combined entity; Google is a minority stakeholder in AOL and could use this as a potential point of entry.

For a full coverage of the Microsoft-Yahoo (and Google, AOL and even the Chinese Government) saga, click here.