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Last Updated: Thursday, 10 November 2005, 18:57 GMT
Yahoo out of talks on AOL stake
Yahoo sign
Yahoo was reportedly unhappy with Time Warner's terms
Internet media firm Yahoo has said it has pulled out of talks to buy a stake in Time Warner's internet unit AOL.

The move came after Yahoo chief executive Terry Semel met Time Warner executives in October, Yahoo said.

"After we learned what their proposed deal terms were we passed and we've never looked back," a Yahoo spokeswoman told the Reuters news agency.

The withdrawal of Yahoo leaves Google and Microsoft as the two favourites to do a deal with AOL.

The Wall Street Journal said on Thursday that Time Warner was expected to pick one exclusive partner with which it will begin talks, possibly as early as next week.


The AP news agency cited unnamed sources as saying the reason why Yahoo pulled out was because Time Warner wanted to retain a majority stake in AOL.

Time Warner has seen its share price plunge since 2000 and has come under pressure from investors.

In September, Time Warner chairman Richard Parsons said he was determined to increase AOL's value which, in turn, would boost the US media giant's share price.

The firm is seeking to transform the business by changing it from a subscriber-based service to an advertising-funded one.

In November Time Warner reported a sharp rise in profit and promised investors a $12.5bn share buy-back programme.


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