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SAN FRANCISCO - Under new pressure from shareholders to show them the money,

Yahoo!

(YHOO)

is reportedly reopening talks to work out a deal with

Time-Warner's

(TWX)

struggling AOL division.

But some analysts see the discussions leading down the same path as last time: nowhere.

Yahoo! and AOL had entered into negotiations earlier this year as a way for Yahoo! to dodge an unsolicited bid by

Microsoft

(MSFT) - Get Report

to merge.

Unable to work out an agreement with AOL, Yahoo! instead turned to rival

Google

(GOOG) - Get Report

to outsource some of its online ads and share the revenue.

Now Yahoo! and Google are facing mounting scrutiny from the U.S. Justice Department and the European Commission, as well as criticism from various advertising organizations who allege that a tie-up between the two companies would potentially result in higher ad prices and greater domination by Google on the Internet.

Google Chief Executive Eric Schmidt recently stated that the search deal with Yahoo! will move ahead on Oct. 11 whether or not the government has completed its review, but there's no guarantee that the government won't try to block it somewhere down the line. And that throws the $800 million in annual revenue that Yahoo! has been banking on from the deal at risk.

"Yahoo! is clearly in need of a change of some sort," says Cantor Fitzgerald analyst Derek Brown, whose firm makes a market in Yahoo!. "And it behooves the company to at a minimum to understand what the industry dynamics currently are and talk to as many partners as possible."

That might be one reason why Yahoo! is reconsidering a relationship with AOL. What that relationship will specifically be, however, remains murky - while a full merger is the default expectation, it's possible Yahoo! could look to scale down the transaction or pursue some sort of revenue-sharing agreement.

Yahoo!'s shares have been in the dumps ever since talks with Microsoft officially collapsed. The stock had climbed as high as $30 when a deal seemed inevitable but now hovers around its pre-merger talk levels of $19.

Yahoo! could not be reached for comment.

Brown says AOL does hold some appeal for Yahoo!, with the traffic flows through its platform and its advertising networks.

"Where things are a little bit less clear is that AOL was lapped by the competition years ago and has certainly the reputation of being something of a has-been in the industry," Brown says.

Activist investor Eric Jackson says he was against a Yahoo!-AOL deal right from the beginning.

"I can understand why AOL wants to do the deal -- to get the property off its hands," Jackson says. But there's too much risk in terms of integrating Yahoo! with AOL, he says, not to mention the cultural differences between the two companies -- as well as the fact that they both represent shrinking assets.

Analyst Jeffrey Lindsay of Sanford Bernstein says it would make more sense for Time-Warner to spin off AOL, allowing it to make its own investments and acquisitions.

"Under Time-Warner, it's on a basic decline path," he says.

But Lindsay questions whether it would be smart for Yahoo! to be taking on AOL with so many problems of its own. He also criticized Yahoo! for being unable come up with any new proposals besides the ones it had already considered months ago.

"It's the same old tired set of ideas being retreaded to give some impression of activity," says Lindsay, whose firm makes a market in Yahoo!.

As for activist investor Carl Icahn, who managed to elbow his way onto Yahoo!'s board, along with two of his picks, Lindsay thinks they will have little effect.

"They are in the minority and don't understand the Web business," he says. "They will challenge the existing board but we don't have high hope for them at all."

Jackson also sees Icahn and his comrades as having limited influence.

"Unless the board is strong enough to make management changes, which I don't think they are, shareholders are left with a property that's going to diminish in value," he says.