Google executives convened an emergency meeting this evening to discuss the implications of a possible revived deal between Yahoo! and Microsoft.

Yahoo! and the software company are understood to be negotiating a deal concerning the control of adverts that are displayed next to internet search results, a market that is currently controlled by Google. The joint venture could be sealed in the next few days.

Speaking at the Google Zeitgeist conference in Hertfordshire, hosted by the internet company's founders Larry Page and Sergey Brin, Eric Schmidt, chief executive, said: "After this press conference the three of us will meet and decide what our response is."

The three companies are fighting over online advertising which is thought to be worth around $40 billion a year and expected to double by 2010.

Over the last few days, Microsoft contacted Yahoo! about acquiring part of the internet company but said that it had not ruled out a full takeover for the whole group. Both Microsoft and Yahoo! began discussing such an arrangement.

Their renewed talks had been triggered by Carl Icahn, the billionaire activist shareholder, who last week threatened to try and sack ten of Yahoo!'s directors and replace them with his own nominated executives. Mr Icahn is trying to use his 4 per cent shareholding in Yahoo! to force it to reopen talks with Microsoft. At the end of January, Microsoft approached Yahoo! with a hostile takeover approach valuing the group at more than $40 billion. Two weeks ago, it raised its offer to $47.5 billion. Both were rejected by Yahoo! as too low.

Sergey Brin, the co-founder of Google, added that he would give Jerry Yang, the chief executive of Yahoo!, refuge within Google if investors push him out.

Mr Schmidt and Google's co-founders added that they believe Google was recession resilient, saying that search advertising is attractive to advertisers as they become more focused on the bottom line.

The co-founders also spoke in detail about the importance of privacy, an area that has been the subject of much controversy as internet advertising has become increasingly targeted to individuals’ interests. "We go through a huge amount of effort to protect private data," added Mr Brin. "If we are not trusted, then we have no business. We are forced to act in everyone's interest," added Larry Page, Google's other co-founder.

Yahoo! failed to return calls yesterday and Microsoft could not be reached.

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