Yang goes back to Time Warner for an alternative

Yahoo CEO Jerry Yang and Time Warner CEO Jeff Bewkes want an AOL-Yahoo merger that would give Time Warner a large minority stake in the new company. The idea is that joining Yahoo and AOL — which itself plans to add a dozen new sites in the next six months — would create the dominant online advertising company. OK, maybe. If you're not counting search.

The deal isn't likely to happen. Desperate for an alternative to Microsoft, Yang is said to be still hoping for an offer from News Corp. as well. Meanwhile, Microsoft execs told the Wall Street Journal they expect merger talks to turn "friendly" any day now. Or the could just propose a new slate of directors when the current board comes up for reelection on March 14. At this rate, that's seeming easier.