Microsoft looking to bid for Yahoo also?

Yahoo’s Carol Bartz and Steve Ballmer in happier times

There is talks of AOL and Yahoo looking for a merger, but now Microsoft is also rumoured to be sniffing around the ailing Yahoo.

"Definitely, people are talking about it," a MSN source told Business Insider.

While we usually think in terms of Bing and Yahoo, which makes the deal less attractive as Microsoft has a 10 year search deal with the company, it is Microsoft’s MSN destination which could benefit the most from an outright purchase.

The source told Business Insider Microsoft was not interested in AOL, noting "Yahoo is a lot more interesting. If it comes into play, then at least their U.S. media business is a pretty interesting asset. It’s complicated because of those Asian assets."

"The portal space is challenged. Facebook is just absorbing more and more minutes – usage. That’s having an effect on portals. The time shifting toward mobile is another factor weighing on portals. The problems AOL and Yahoo have are exacerbated by management."

Microsoft’s MSN site has been a steady money loser, but according to the source there has been a realization from management that "MSN is a critical component of helping Bing win."

A Yahoo insider has recently claimed “Yahoo is open to selling itself to the right bidder” according to TNW.

Microsoft famously attempted to purchase Yahoo for $ 44.6 billion in 2008.  The company is currently trading for close to a third of the value to a market cap of $16 billion.