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. Last Updated: 07/27/2016

Technology Giants Spar Over Yahoo

SAN FRANCISCO -- Yahoo, which was widely believed to be running out of alternatives to accepting Microsoft's takeover offer, has become a target of two warring camps of technology giants and their media allies, sources said on Wednesday.

News Corp is considering joining Microsoft in a bid for Yahoo which, if successful, would align Yahoo with News Corp's MySpace online social hangout and create a more formidable rival to Internet juggernaut Google, newspaper reports said.

But Yahoo, which announced earlier on Wednesday its plans to test Google search ads alongside Yahoo web search services, is closing in on a deal with Time Warner with its AOL unit, several sources said.

The game of musical chairs among the titans of the Internet follows two years of on-again, off-again talks to explore industry-reshaping mergers among different configurations of the same players.

Google, unaccustomed to being backfooted by its rivals, is considered a secondary player unlikely to enter the bidding as its growing dominance in web search and search-based advertising could be blocked by regulators.

Reports were sketchy on how a Microsoft deal with News Corp might be structured, making it difficult for analysts to say which combination might prove the superior offer. Several said Yahoo had regained some of the negotiating momentum it had lost with Microsoft.