SAN FRANCISCO – Yahoo Inc.’s board of directors, which now includes one-time nemesis Carl Icahn, has approved new talks with Time Warner Inc. on a possible merger with America Online, a news report said Wednesday.

The Yahoo board made the decision after its first meeting since appointing Icahn to the body as part of a settlement that ended a proxy battle for control of the Internet giant, according to the Financial Times, citing an unnamed source.

No official talks are under way, the newspaper said.

The move comes after Yahoo survived an aggressive unsolicited bid from Microsoft Corp., which eventually withdrew its bold offer to gobble up the Web portal. But it also highlights the company’s ongoing search for a strategic partnership in an effort to remain competitive.

A possible merger between Yahoo and America Online, Time Warner’s struggling portal, had been mentioned in the past, although some analysts were skeptical the combination would work.

Meanwhile, Yahoo is also pursuing a search ad deal with Google Inc., which analysts expect to encounter stiff regulatory scrutiny.

Only subscribers are eligible to post comments. Please subscribe or to participate in the conversation. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.