Microsoft Gains in AOL Stakes

Microsoft's (MSFT Quote) links with Time Warner (TWX Quote) may give it an edge in the rapidly shifting battle for America Online, analysts say.

On Thursday, it emerged that Yahoo! (YHOO Quote) had dropped out of the bidding for a partnership with AOL, citing the high price tag being sought for the Dulles, Va., Internet property. That potentially slims the race for AOL allies to Microsoft and Google (GOOG Quote), which may be bidding along with media giant Comcast (CMCSA Quote).

But some investors believe Google could end up being an also-ran. Microsoft, the world's largest software company, and Time Warner, the world's biggest media company, share a strong emphasis on intellectual property, says Rob Enderle, a principal analyst with Enderle Group in San Jose, Calif. He notes that Microsoft is fighting against the spread of the Linux free operating system, while Time Warner is battling against Internet pirates. ...