Report: Yahoo Chairman, Microsoft CEO meet in New York

Are Yahoo and Microsoft trying to work out a new merger deal?

Watching Yahoo and Microsoft Yang to Ballmer: Baby come back while trying to work out a merger deal last year was like watching two awkward teenagers at a their first high school formal. But, with cofounder Jerry Yang out as CEO and Carol Bartz in, the dancing days may not be over.

Thursday, a Valleywag tipster claimed to have ridden an elevator with Yahoo Chairman Roy Bostock and Microsoft CEO Steve Ballmer at the Time Warner Center. "As we entered the lobby they both walked out and seemingly proceeded to lunch together," the tipster wrote.

Valleywag's Owen Thomas floated three possibilities for a Ballmer/Bostock meeting:

1. A friendly meeting between two colleagues.

2. Yahoo and Microsoft could be trying to negotiate a deal — but why would Bartz sign on as CEO, if the company was about to be sold?

3. Bostock could be "trying to negotiate a sale of the company or its search business behind Bartz's back" — but this seems very unlikely.

One other possibility: A partnership of sorts as both companies face competition from Google and a down advertising market.

Thomas also noted the meeting place — the Time Warner Center, home of AOL's parent company -- which could suggest a three-way deal involving Yahoo, Microsoft and AOL.

Neither Microsoft nor Yahoo had any comment.

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