This little story crossed the wires this morning. They were reporting on a Wall Street Journal piece:

The paper reported that the talks center on a deal that would fold Time Warner’s AOL Internet unit into Yahoo, according to the people, who still consider a Yahoo purchase by Microsoft as the most likely outcome.

I still expect MS to make it happen, it is hard to compete with the funding they can pull together, but this would be a nice evolution for AOL.

This is currently number two on Techmeme.

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