Time Warner is still negotiating a deal with Microsoft and Google regarding its AOL unit, but it's not likely to sell a stake in AOL; instead, an agreement - which may come in a week or two - would probably revolve around cooperation on web search and advertising sales, reports the New York Times, quoting an unnamed executive briefed on the negotiations. As talks have proceeded, both Google and Microsoft have backed off from their original proposals to purchase a stake in AOL or acquire it outright. Time Warner has been pressured by financier Carl Icahn, who says the company is mismanaged and undervalued and is exploring options for splitting it up.

Jordan Rohan, an analyst with RBC Capital Markets, said Time Warner CEO Richard Parsons had always preferred to keep substantial control of AOL.

"Parsons has done a masterful job of making it look like AOL was for sale when I don't think it was," he said. "The most likely outcome is simply an improvement in the [search revenue] terms AOL gets from Google."

AOL is the largest source of search traffic for Google other than Google's own websites.