
Meanwhile The Wall Street Journal is reporting that discussions are in early stages for either a full takeover or a joint venture. Yahoo and Microsoft are second and third respectively in the internet search business after Google.
Microsoft is getting increasingly concerned about Google, and the purchase would enable it to challenge the search giant on more equal ground.
Microsoft is also concerned that Google Applications will cut into its lucrative Office business.
In keeping with company policy, a Microsoft spokesman said that the firm does not comment on rumours.