Yahoo’s board of directors, which now includes billionaire investor Carl Icahn and two allies, has given the thumbs up for renewed talks about a possible deal with Time Warner’s AOL, a report says.

On the news, shares of Yahoo edged up $.04, or .2 percent, to $18.97, while shares of media conglomerate Time Warner tacked on $.34, or 2.5 percent, to $14.17 in morning trading.

The Financial Times, quoting an unnamed source, said that the board gave the go-ahead at a meeting Tuesday. Yahoo, which turned away a merger bid by Microsoft earlier this year, has held talks in the past about a deal with AOL, which has been remodeling its business into an open web portal and advertising network.

AOL, which was put on the block by Time Warner Chief Executive Jeffrey Bewkes, served as a subplot to the machinations between suitor Microsoft and the object of its affection, Yahoo. Microsoft ultimately broke off negotiations in June, 5 1/2 months after initiating an unsolicited $31 per share bid on January 31.

Mr. Icahn, an investor in Yahoo, mounted a proxy fight to displace Yahoo’s incumbent board in a bid to push through a merger with Microsoft. Seeing that his slate was unlikely to win a clear-cut victory, he settled for board seats for himself and allies Frank Biondi, onetime Universal Studios chief, and John Chapple, former chief executive at Nextel.

Mr. Icahn is expected to continue his support for a deal with Microsoft, which is seeking Yahoo to gain leverage against Google’s dominance of online advertising.

For the second quarter, Time Warner’s overall revenue climbed 5 percent to $11.6 billion, but AOL’s revenue fell from $1.3 billion to $1.1 billion, a 16 percent decline. Likewise, AOL’s operating income slipped from $360 million in the 2007 period to $230 million.