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Yahoo! bows out of AOL takeover race

NEW YORK - Yahoo! has reportedly ruled itself out of the running to buy a stake in Time Warner's AOL, citing integration problems, in a move that still leaves the door open for Microsoft and Google to emerge with a bid.

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The Bloomberg news service says Yahoo! spokeswoman Joanna Stevens has confirmed it will pass up on the opportunity due to the potential upheaval involved in integrating the two brands.

The news service also quotes analyst Scott Kessler, of Standard & Poor's in New York, as saying this latest decision makes sense as Yahoo! has far less to gain from linking up with AOL than rivals such as Google and Microsoft.

It was previously speculated that Yahoo! was one of a number of suitors, following an announcement by Time Warner's chief executive Richard D Parsons last month that serious discussions with partners were under way.

Financial sources in New York claim that Microsoft is now the front-runner, in a move that could see its MSN brand merged with AOL.

Last month, it emerged that Google may be linking up with Comcast to make a bid of as much as $5bn (£2.9bn). This would involve taking over the AOL Instant Messenger Service as well as

AOL's websites are the second most visited in the US behind Yahoo!.

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