Web portal Yahoo! may have finally found its white knight in its bid to avoid an acquisition by Microsoft. Time Warner and Yahoo! are reportedly close to a deal to combine Yahoo! and Time Warner's AOL, with Time Warner taking a 20% stake in the new entity. The Time Warner investment reportedly would give Yahoo! the cash to buy back some shares from investors. Meanwhile, in the Microsoft camp, News Corp reportedly is contemplating banding with Microsoft in making a joint bid for Yahoo!, raising the possibility of a combined Yahoo!-MySpace-MSN entity.

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