The Wall Street Journal broke the story that Yahoo plans to soon outsource its search advertising to Google, following a successful test.

Reuters reports that the possible partnership with Google would be part of a bid by Yahoo to forge a three-way deal where Yahoo would merge with AOL in return for Time Warner taking a stake in Yahoo.

But the Journal cites unnamed sources, and neither Google or Yahoo would comment to Reuters -- leaving many in the industry skeptical.

TechCrunch's Michael Arrington says the announcement is simply Yahoo putting its chips on the table for Microsoft. "It means that Yahoo is hyping its last (barely) credible alternative to Microsoft -- a full outsourcing of search marketing to Google to boost revenues and shareholder value."

Such a deal would add more than $1 billion a year to Yahoo's cash flow, according to The Journal, which could provide Yahoo with proof to support its argument that it's worth more than Microsoft offered.

But All Things Digital's Kara Swisher says regulators would never let the companies get away with any kind of significant ad search outsourcing deal.

Stay tuned … the saga will continue.