Yahoo! has stepped up talks with Time Warner, as the Internet company seeks an alternative to Microsoft’s buyout offer. According to The Wall Street Journal, negotiations are around a deal that would fold AOL’s Internet unit into Yahoo!. Citing people familiar with the situation, the Journa, also said that its sources still expect Microsoft’s purchase of Yahoo! as the “most likely” outcome.

Microsoft announced its takeover bid for Yahoo! Feb.1; Yahoo! rejected the $44.6 billion bid saying it undervalued the company.