The Financial Times reports that Yahoo's board has cleared the way for a fresh round of merger negotiations with Time Warner's AOL. The decision came as Yahoo welcomed activist investor Carl Icahn, former Viacom boss Frank Biondi and former Nextel chief Frank Chapple to its board for the first time. Sources told the FT that active negotiations for AOL are not underway at this stage. Talks between the ailing Web giants became serious in the spring as Yahoo grasped at alternatives to an unsolicited Microsoft takeover, but nothing came of the negotiations. Last week, Time Warner Chief Jeff Bewkes said …

A group of Web companies led by advertising powerhouse Google joined Web users in challenging the Bush administration's bid to clamp down on copyright violation. The group on Monday urged the U.S. Department of Commerce to exclude provisions on the sale of copyrighted music and movies on the Internet from a proposed treaty with the European Union, Japan and other nations. Google and the other companies said the U.S. government was still working on striking a balance between the free exchange of information on the Web and protecting copyrights, arguing that a treaty would be counterproductive. The treaty in question …

A recession may be looming, but the gaming sector shows no signs of slowing down. According to NPD Group, game sales rose 32% to $10.6 billion from January to August. Venture capitalists, still flush with cash, clearly see plenty of opportunity here. On Tuesday, Trion World Network, an online gaming company, raised a whopping $70 million in C-round funding. Among its investors: Trinity Ventures, Rustic Canyon, Time Warner and NBC Universal. Trion's recent round puts it in the top 10 list of all venture capital deals done in the first half of 2008, according to PricewaterhouseCoopers, which said the Trion …

MySpace is rolling out a new advertising product called the Self-Serve Ad Service that makes it easy for anyone to promote their product or service on the social network. Users can upload ads they've created or make new ones using the MySpace system. To create new ads, users choose from a list of templates and upload an image to place in the ad. They can then target their audience by gender, age, region, city/state and interests. The system allows for such hypertargeting as women aged 27-52 who live in Rancho Cucamonga, Calif. and love the book "Brave New World." …

As far as BusinessWeek's Spencer Ante can tell, Silicon Valley VCs believe "the tech industry will emerge relatively unscathed" from the financial crisis on Wall Street. Why? Because tech companies, for starters, don't really rely on debt, and Silicon Valley VCs are still "stocked to the gills" with cash. "VC will survive," says Diana H. Frazier, managing partner of FLAG Capital Management, LLC, a Silicon Valley investor that places money with VC firms on behalf of other investors. "It is a long term business that doesn't react to short term crises." That said, the deplorable state of our capital …