News Corp is in “serious talks” with Microsoft over a joint bid for Yahoo, reports the WSJ, although the NYT says the talks are at a “sensitive stage”. Meanwhile, Yahoo and Time Warner’s AOL are nearing a deal to combine their internet operations, a move that could thwart Microsoft’s effort to acquire Yahoo, the Journal added. The possible Yahoo-AOL tie-up is part of Yahoo’s threefold plan to present shareholders with an alternative to Microsoft’s unsolicited offer. Yahoo would also propose repurchasing billions of dollars of its own shares and is negotiating with Google about an advertising tie-up. On Wednesday, Yahoo announced a short-term test to carry Google search advertising, reports the FT. The NYT says the alignment of Microsoft and News Corp could allow Microsoft to raise its bid, intensifying pressure on Yahoo and its shareholders and leaving them one less alternative to escape Microsoft’s grasp.