Google and Yahoo will announce "a search partnership of some sort at 1:30," TechCrunch reports. The Wall Street Journal confirms the news, reporting:
Yahoo has concluded talks with Microsoft without reaching a deal, people familiar with the matter say, with Microsoft no longer willing to undertake a merger at $33 a share. Yahoo is also said to be close to reaching a search-advertising pact with Google.
Update: Microsoft's released a statement confirming merger talks are finished. It also says its still up for talking partnerships with Yahoo:
In the weeks since Microsoft withdrew its offer to acquire Yahoo!, the two companies have continued to discuss an alternative transaction that Microsoft believes would have delivered in excess of $33 per share to the Yahoo! shareholders. This partnership would ensure healthy competition in the marketplace, providing greater choice and innovation for advertisers, publishers and consumers.As stated on May 3rd and reiterated on May 18th Microsoft was not interested in rebidding for all of Yahoo!. Our alternative transaction remains available for discussion.