Here are a few key facts and passages from the article by Julia Angwin, Kevin J. If Gates and Ballmer wanted a deal with AOL (Time Warner) as a Christmas gift, it appears that they're not going to get it.
Julia Angwin And Kevin J. According to a Reuters story (via News.com): Microsoft, Google still vying for AOL: that proposals from both Microsoft and Google have been submitted to AOL to "strike an internet advertising partnership" with the company.
More details about what caused the discussions to end this WSJ article (sub required) by Julia Angwin and Kevin J. We blogged late last week that Yahoo had dropped out of the running for a piece of AOL.