MS/Yahoo merger out, collaboration in?

Microsoft and Yahoo's merger talks have already fallen apart, say sources in touch with the Wall Street Journal. Although the two companies share an equal worry about Google leading in web ads and searchs, neither has found the common footing needed for a union. The two software firms have instead decided to explore teamwork in the future, though the nature of those deals wasn't available Friday afternoon.

The news contradicts earlier reports from the New York Post and the Journal itself, which earlier today suggested active negotiation between Microsoft and Yahoo. The closest association both developers have had to date is currently limited to interoperability between Windows Live Messenger and Yahoo Messenger.