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Yahoo! Drops AOL Bid

Published reports say the Internet giant is turned off by the price tag.



is taking a pass on

Time Warner's


America Online, according to published reports.

The Internet giant decided not to pursue buying a stake in AOL after finding Time Warner's proposed terms unacceptable, according to reports in

The Wall Street Journal



. Earlier reports suggested that Time Warner had rebuffed Yahoo! in a bid for a part of AOL's programming arm that valued the operation at $10 billion.

The news comes just a month after Yahoo! joined the bidding for AOL in a development

reported by

. The apparently frenzied bidding for AOL struck some observers as a surprise given the company's long-held albatross status at parent Time Warner. Meanwhile, Time Warner is locked in a battle with activist shareholder Carl Icahn and is presumably feeling pressure to act in some fashion to revitalize the once-hot unit.


(GOOG) - Get Free Report

, the top search engine, and


(MSFT) - Get Free Report

, the largest software company, are now seen as front-runners for part of AOL, people familiar with the situation told the


. The newspaper also reported that Time Warner may make a decision as early as next week about which company with which it will enter exclusive negotiations.

Any potential AOL-Microsoft partnership may face antitrust issues and a deal with Google could include cable giant


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, the newspaper said.

Yahoo!, which is based in Mountain View, Calif., couldn't immediately be reached before the start of regular business hours. Time Warner spokesman Edward Adler declined to comment.