Yahoo and Microsoft sound out potential partners

Following the collapse of talks over a possible $44.6bn (£22.4bn) takeover of Yahoo by Microsoft in May, Yahoo has sought to appease concerned investors by unveiling a string of initiatives.

Last month, it struck a deal with Google, in which Google's paid-for search results are shown alongside Yahoo's natural results. Yahoo claims it will earn up to $450m (£227m) from the tie-up.

Now, according to reports in the US, it has emerged that Microsoft is talking about alternative partnerships with Time Warner, which owns AOL, and News Corporation, owner of MySpace.

Talks are also reportedly taking place between Yahoo and Time Warner, that could lead to a potential merger of AOL with Yahoo.

At the same time, Microsoft is reportedly meeting with rebel Yahoo shareholder Carl Icahn to encourage him to maintain his bid to replace Yahoo's board with executives open to a Microsoft deal.

Earlier this month, Yahoo urged shareholders to support its current board of directors, ahead of its eagerly anticipated AGM next month.

A presentation, circulated to all Yahoo investors ahead of the AGM on 1 August, features a timeline of the Microsoft talks, indicating that on two separate occasions, executives had asked Microsoft if the company was still interested in doing a deal.