Last year, Yahoo and Microsoft explored the idea to merge forces to compete against Google but the talks led nowhere. According The Wall Street Journal, executives at Microsoft and Yahoo are taking a fresh look at a merger of the two companies or some kind of match-up that would pair their companies' respective strengths The Wall Street Journal said.

"The renewed talks are a sign of the continued growth in Google's power and problems over the past year with in-house efforts at Yahoo and Microsoft to ride a boom in Internet advertising. Meanwhile, management changes at both companies could help pave the way for a pairing that a year ago couldn't happen."

"Still, Microsoft has technica

l expertise that might benefit Yahoo. Yahoo is one of the world's most popular Web sites, attracting millions of consumers a day to services such as Yahoo News, Finance and e-mail, which in turn attract advertisers. But Yahoo last year suffered a delay in converting to a new online ad system designed to close the gap with Google. That system, codenamed Project Panama, hasn't yet significantly boosted the company's revenues, though the company predicts the benefits should begin shortly. On top of that, Yahoo is facing increased competition to sell advertisers the graphical display ads, such as banners, that have been its bread and butter." The Wall Street Journal