Google is considering providing finance to another company or group of companies to fund the acquisition of internet giant Yahoo, reports Bloomberg.

Yahoo fired Carol Bartz as CEO in September apparently as the board felt her turnaround plan for the firm wasn’t producing results in terms of keeping pace with Google in the online advertising market.

There have since been rumours that private equity firms are looking at Yahoo and that Microsoft has renewed an interest first shown in 2008 when it tabled a US$44.6 billion bid that was eventually rejected.

The Wall Street Journal has also reported that Google is considering financing a bid by private equity firms for Yahoo.

However, Bloomberg sources said Google could still decide not to back a bid and has yet to engage in serious discussions with any potential partners. Google isn’t thinking of attempting to buy Yahoo outright, the source added.

Bloomberg quotes Opus Research analyst Greg Sterling saying that Google may lend its backing to Yahoo to increase competition in the online advertising market. Sterling said Google potentially backing Yahoo would be similar to Microsoft’s investment in Apple in the late 1990s to ensure competition remained in the computer market.

It is likely that any acquisition bid for Yahoo that involves Google will be scrutinised by regulators. The US Federal Trade Commission, European Union and Texas State are currently reviewing Google’s business practices around search and advertising.

Yahoo admitted in September that its financial advisers were “fielding inquiries from multiple parties that have already expressed interest in a number of potential options.” Reports earlier this month suggested Yahoo was planning to provide potential buyers with financial information, related to a possible sale.

Other names to have been linked to a Yahoo bid are private equity firms KKR & Co and Blackstone Group. Chinese company Alibaba Group, of which Yahoo is the largest shareholder, has also expressed an interest.