Yahoo Trying To Escape Microsoft's Jaws With Help From AOL, Google

It seems that both the current and former Internet giants, Google and AOL respectively, are teaming up to help deliver Yahoo! from Microsoft's clutches.

Last weekend, Microsoft CEO turned up the heat on Yahoo! by submitting an open letter threatening Yahoo! that if it did not accept the previous offer of $31 per Yahoo! share (now down to around $30 per share because of Microsoft's dwindling stock price) within three weeks, then Microsoft would be forced to turn the offer hostile and bypass the Yahoo! board and try to convince the investors directly via proxy battle.

In an effort to make the Microsoft deal less palatable to Yahoo! investors, Yahoo! has been seen courting both AOL and Google, announcing play-dates left and right like an over-hormonal teenager.

On Wednesday, Yahoo! announced that they would be conducting a joint test starting next week with Google that would put Google AdSense ads on Yahoo! pages alongside Yahoo!'s own ad content. Analysts report that this could provide a significant boost to Yahoo!'s revenue, as Google AdSense makes more money than Yahoo!'s own ad programme. Increased revenue means increased value, which makes Microsoft look like a cheap date in the investor's eyes.

But the fun doesn't stop there!

Yahoo! also announced they're close to finishing a deal with Time Warner to incorporate most of AOL (everything but the dial-up business) into Yahoo!. The deal would mean Time Warner would fold AOL into Yahoo!, along with some cash, for a 20% stake in the resulting Yahoo!AOL mutant. The extra cash from Time Warner would then be used by Yahoo! to repurchase some of its own stock at a price higher than what Microsoft is offering in order to further dissuade investors from taking Microsoft's deal.

Tired yet? Nope, it's still not over - there's more!

Microsoft isn't taking all this news lying down, and they've announced that they're in talks with News Corp., owners of both The Wall Street Journal and MySpace, to form a joint strike force to take over Yahoo! That's right folks - this would mean that, if successful, MSN, Yahoo! and MySpace would be one huge company.

I'm going to let that horrible image sink in for a moment.

... Yeah, it gives me the creeps too.

This situation gets juicier and juicier as the weeks drag on. Who needs soaps when you've got the tech world?

News Corp., AOL Pursue Yahoo Deals [WSJ]

Thanks to Jason Calacanis's Twitter feed for the tip!

Side note: this could quite possibly be the article with the most "!'s" I've ever written. My pinky is tired.