The possibility of Microsoft buying Yahoo isn't an entirely new one: the two companies engaged in talks about a year ago but ultimately decided to go their separate ways. But what has happened in the year since? Yahoo has continued to struggle [1] while Microsoft has seen an increasing threat in the form of Google [2] and both companies have seen major reorganizations in their top management. Some form of merger between the two companies might make more sense now than it did before and indeed, The Wall Street Journal is reporting that "executives at Microsoft and Yahoo are taking a fresh look at a merger of the two companies or some kind of match-up that would pair their companies' respective strengths." While talks are reputedly in the early stages, Microsoft is certainly feeling a sense of urgency due to the Google threat. "Short of a wholesale merger, Microsoft could spin its online group into a separately-run Yahoo, in return for a Yahoo stake. Though a person familiar with the matter says Microsoft would likely want to acquire Yahoo," the WSJ reports. While a buyout would certainly make sense for both companies on some level, the differing corporate cultures could pose a significant hurdle to a merger. "Co-founder Jerry Yang, for one, has a reputation for disliking Microsoft and avoids using Microsoft products," the WSJ reports.

For more on the possible merger:
- see this WSJ story [3] (sub. req.)