is taking a pass on
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
. 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.
, the top search engine, and
, 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
, 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.