Yahoo, Time Warner reportedly discuss deal to thwart Microsoft bid

Yahoo and Time Warner have held talks on a deal designed to thwart Microsoft's bid for Yahoo, according to a report in The Wall Street Journal.

Under a possible deal, Yahoo would acquire Time Warner's AOL in exchange for the media conglomerate taking a large minority stake in the combined company, according to unidentified sources familiar with the matter. The companies could save $1 billion a year, the sources said. Talks between the companies held earlier heated up when Yahoo reapproached Time Warner about a proposal to take to its board.