Yahoo Flirting With AOL Something Fierce, Microsoft Still On Doorstep With Flowers

An unnamed source (aren't they all?) confirmed a rumor that had been floating before: that Yahoo, in order to escape being grabbed by Microsoft, would hurl itself at the second-ugliest suitor in the room, AOL. The new details say that Time Warner would pay some cash up front for a 20% stake in a joint AOL-Yahoo program. The AOL side, valued at $10 billion, would include all properties (such as our worthy competitor Engadget) but not the dial-up service that your grandma and pretty much no one else still has. Microsoft still may get its way, though: Word is that it's teaming with MySpace-owner News Corp for some kind of a three-way proposition. [Reuters]