Yahoo! spent the holiday weekend locked in talks with Time Warner. The two are looking for a way to split Yahoo! up in order to fend off Microsoft's takeover attempt.
The idea is to find a way to merge AOL with Yahoo! in order to fend off both Microsoft and activist shareholder Carl Icahn.
The firms spent the time in talks with Goldman Sachs and other partners, The Times reports.
The company has also been pursuing partnerships with News Corp's MySpace. Meanwhile, Carl Icahn continues to pile on the pressure ahead of Yahoo!'s general meeting. The meeting is on 1 August and Yahoo!'s management will face a battle to get their choice of board members re-elected.
Icahn is suggesting his own slate of new directors, who support the Microsoft bid, and another shareholder is putting themselves forward for election.
So any alternative deals the management can show to shareholders at the August meeting will be welcome.
Yahoo!'s ad deal with Google is being looked at by the Department of Justice, which is concerned at the market impact of the first and second placed online ad companies working together. ®