Microsoft Opens Window To Yahoo! Deal

Could a Microsoft-Yahoo! merger be in the works? The New York Post reports that Microsoft has quietly approached the Internet giant about opening merger negotiations, after informal talks fell apart several months ago. Insiders say Microsoft is looking to fight back against Google after the search-engine leader bested it in a spate of recent deals.

"They're getting tired of being left at the altar," says source close to the company. Together, the companies could control 27% of the search engine advertising market, compared to Google's 65%. But analysts tell the New York Times that any merger would face "potentially unmanageable risks," thanks to sharp differences in the companies' operating cultures. (More Microsoft stories.)