Yahoo (NSDQ: YHOO), which is bracing for the start of a proxy fight with Microsoft (NSDQ: MSFT) starting next week, is now trying to buy some time, including a plan to postpone its annual meeting, reports NYT. Among the other options it is exploring with some urgency is an option to merge with AOL (NYSE: TWX), the story says, something that many have considered unlikely before. Even AOL CEO Randy Falco dismissed it last week at the IAB conference.

The story says that Yahoo has been talking to AOL, and even AOL’s 5 percent owner Google (NSDQ: GOOG) has given its blessing of sorts. This comes after Yahoo held a round of talks with News Corp along the same lines. In AOL’s case though, AOL won’t be able to buy Yahoo, but a merger could be on the cards.

In any case, tough to see any of these possible combinations working against the Microsoft bid.

Update: The scenario under discussion would involve folding AOL into Yahoo with Time Warner taking a sizable minority stake in the combined entity, reports WSJ. Time Warner is putting the finishing touches on that proposal now…the companies estimate about $1 billion in cost savings annually. The talks are focused around creating an online ad behemoth, including AOL’s Advertising.com/Platform-A business with Yahoo’s brand driven focus.