Daum Communications, South Korea's second-largest Internet portal, is in talks with Google about possible business links, an AFP report said.
The AFP report quoted Daum as saying that Google or another US portal could be its business partner in the on-line pay-per-click advertising market.
'We are in talks with Google and another US company on establishing ties in the PPC market. Our partner could be decided by the end of this year,' a Daum official told AFP.
Daum president Lee Jae-Woong said his company would keep its door open for mergers with other companies but nothing was on the cards at present.
'There are no ongoing talks about mergers or acquisitions with other firms, although we always keep open our door for such deals,' Lee was quoted a saying.
Google, which started its Korean-language search site in 2000, has struggled to boost its presence in South Korea, the AFP report said.
Nearly three-quarters of homes have high-speed Internet access but many prefer local services, the report said.
Daum posted a net profit of 9.3 billion won ($9.89 million) in the third quarter, compared with a loss of 10.1 billion won ($10 million) a year earlier.
It acquired Lycos for $95 million in 2004 despite concerns about a lack of profitable business models in the embattled US portal.
Lee said the net loss of Lycos would be reduced from 45 billion won ($44 million) last year to 5 billion won ($5 million) this year.