AOL has introduced a beta version of AOL Mobile Search for the iPhone and the iPod touch, meanwhile emerging reports claim AOL may join Yahoo in an attempt to repel Microsoft's unfriendly takeover attempt.

As first reported by iLounge, Mobile Search has been developed to exploit the multi-touch interface of Apple's devices. It gathers search results by combining content from across the web as well as from Moviefone, MapQuest, AOL CityGuide and other AOL services. The new beta service is available at search.aol.com.

Yahoo and AOL are also reported to be mulling over a potential merger in an attempt to thwart Microsoft's attempt to take Yahoo over. Management are considering a deal in which AOL folds into Yahoo, with current AOL parent Time Warner making a major investment in the combined company in return for a 20 per cent stake in the combination.

Yahoo will take the cash from Time Warner in order to invest in a share buy back scheme, repurchasing stock from investors at between $30-40 per share. The purported deal would apply significant pressure on Microsoft to raise its $29.24 bid for Microsoft, in a deal the failure of which could mark a watershed moment for the Redmond software giant.