Microsoft Corp. (MSFT), the world's largest software maker, has emerged as the lead suitor for a stake in Time Warner Inc.'s (TWX) Internet unit America Online (AOL), according to a report by The New York Times.

Microsoft aims to fold its MSN Internet service (search) into a venture with AOL, the newspaper said, adding that any agreement would be several weeks away.

One issue that has yet to be resolved would be how the venture would be governed. Time Warner does not want to cede control unless it receives a "very rich offer," the report said.

Microsoft and Time Warner (search) could not be immediately reached for comment.

Other suitors seeking a stake in AOL include Google Inc. (GOOG), Comcast Corp. (CMCSA), Yahoo Inc. (YHOO) and News Corporation (NWS), sources familiar with the situation previously told Reuters (search).

News Corp. is the parent company of the FOX News Channel, which operates FOXNews.com.