As the Incredible Hulk of telecoms grows even stronger, AT&T has less reason to continue a co-branding partnership with Yahoo set to expire in April 28, or so contends the WSJ (sub. req.) in a lengthy, complicated piece based primarily on unidentified sources. The partnership dates back to 2004 when AT&T was still SBC. One anecdotal sign of trouble: reports that the Yahoo logo has been painted out on AT&T trucks. “The fraying of the alliance could be a blow to Yahoo, which gets roughly $200 million to $250 million of revenue annually from AT&T, according to two people familiar with the matter. It also shows how AT&T itself is much stronger, and less reliant on Yahoo, than during the early days of their alliance.”
One honking big fly in the ointment: Google, which has been offering large payments like the $900 million going to Fox Interactive Media. A chance to get paid instead of paying what is essentially commission to Yahoo could be hard to ignore. One variation would change the way Yahoo is paid, omitting broadband service from the equation and sharing revenue only for services like music and video. Another has the two agreeing to advertising on mobile phones or other services. 
On at least one occasion “people familiar with the matter” say AT&T Chairman and CEO Ed Whitacre
has raised the idea of a merger but Yahoo, so far, isn’t interested.