Microsoft targeting AOL for acquisition

On Friday, rumours did rounds that Internet firm AOL Inc may be an acquisition target for Microsoft Corp. Gaining from the rumours, AOL shares rose as much as 5.8 percent on the New York Stock Exchange. In afternoon trading they were up 46 cents, or 2.2 percent, at $21.46, as the tech-heavy NASDAQ slid more than 3 percent, according to Reuters.

AOL, whose web portal currently outsources web search to Google Inc, is in the process of discussing a new web search deal with "more than two potential partners, according to AOL Chief Executive Tim Armstrong.

Business Insider news website reported on Friday, citing an unknown source, that the result of those discussions could be an outright sale of AOL to Microsoft.

Microsoft, whose MSN web portal competes with AOL and Yahoo, has already signed a deal for its Bing search engine to provide online search for Yahoo sites, and is keen to increase its share of the search market. AOL, which split from former parent Time Warner Inc last year, has a market value of about $2.2 billion. --------

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