From the reg required story:

Time Warner Inc. is closing in on an agreement with Microsoft Corp. to build an online-advertising service designed to compete with Google Inc., say people familiar with the negotiations.

After months of on-again-off-again negotiations, the two companies are now focused on a deal that would combine advertising-related assets – with minimal, if any, money changing hands. An agreement is expected to be struck sometime before year-end, but it is still possible that AOL could choose instead to deepen its relationship with Google at Microsoft's expense.