Yahoo mulls AOL merger to foil Microsoft bid

GLOBAL - Yahoo is believed to be evaluating possible tie-ups with a range of media groups, most notably AOL, as the online giant prepares to reject Microsoft's unsolicited US$44.6 billion bid today.

In addition, it is thought that alliances with Google or Disney are also being considered. It is believed that Yahoo considers Microsoft’s bid to severely undervalue the company.

Microsoft CEO Steve Ballmer has signalled that he will not take no for an answer, with observers noting that a improved bid is likely.

Speculation that Rupert Murdoch’s News Corp might be a potential white knight for Yahoo, meanwhile, has been categorically denied.