Yahoo is not longer interested in buying a stake in Time Warner's AOL, reports Reuters. "After we learned what their proposed deal terms were, we passed and we've never looked back," a Yahoo spokeswoman is quoted as saying when confirming a report in the Wall Street Journal. She said Yahoo had not made an offer for AOL but said Yahoo CEO Terry Semel had met with Time Warner chairman Richard Parsons in October.

The Journal, citing a person familiar with the matter, said Time Warner wasn't interested in the terms Yahoo was willing to offer but is still in talks with Google and Microsoft, with one of which Time Warner is expected to start exclusive negotiations in the coming days.

Apparently, an AOL combination with Microsoft is now more likely to be a smaller-scale partnership, whereas Google is willing to buy a minority stake in AOL.