The
Wall Street Journal reports that Time Warner and Microsoft are near an accord that would have the two corporate monoliths combining certain advertising functions at AOL and MSN, their
online units. The deal could be signed by year-end, says the
Journal. Or it might not happen at all if, at the last minute, Time Warner determines to "deepen its relationship with Google at
Microsoft's expense." The negotiations are set against the prospect of a Carl Icahn-led proxy fight aimed at replacing TW shareholders. It's not known what Icahn think of a TW-Microsoft alliance,
although he has said repeatedly that the parent company has terribly undervalued its chief online asset. The TW-Microsoft deal, which would require little if any money to change hands, is intended to
maximize the advertising potential of AOL and MSN by possibly combining sales forces. At the same time, TW would drop Google as its search provider and replace it with MSN's search service. All in
all, the proposed alliance falls far short of the sweeping and dramatic deal that many observers believe is in the best interests of TW's resurgent AOL division.
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