A report in The New York Times yesterday suggests that "Microsoft has emerged as the front-runner in the talks surrounding the potential sale of a stake in America Online."

"When Time Warner released its quarterly earnings last Wednesday," the Times reports, "its chairman and chief executive, Richard Parsons, for the first time acknowledged the talks but tried to dampen expectations."

In the most important part of the report, the newspaper's Richard Siklos writes:

"Bill Gates, chairman of Microsoft, said last week in a meeting with reporters and editors at The New York Times that his interest in AOL is about playing a greater role in the future of advertising."