Rumours are arising once more in the Chinese media that Yahoo has been having secret discussions with Sina about a possible merger, and that their negotiations are finally making some ground.

Reports are saying that Yahoo will incorporate Sina into its own fold, after which Sina would then take in Yahoo China in return.

So far, the CEOs of each side (Mr. Wang Yan speaking on behalf of Sina and Mr. Zhou Hongwei speaking for Yahoo China) have stated that they know nothing about this issue. However, it is generally thought in the industry that such an amalgamation is quite likely since the two sides are so complementary to each other: Yahoo is mainly involved in searching, e-commerce, email and instant communicaitions, while Sina emphasizes news and event reports. Both are also listed companies, which would make it easier for them to undergo the necessary capital procedures.

Despite this, they would face difficulties on the Chinese side – since Sina is very influential in spreading information, it is not known whether the incorporation will be allowed by Chinese policy-makers.

In either case, however, the rumor has been warmly received by professionals within the industry, who believe that should the merger be approved, it would be a win-win result for both sides, not only helping Yahoo realize its dream of dominating the industry, but also assisting Sina to expand the scope of it's own power.