Yet, like any merger discussion, this one has its share of drama.

According to a person close to Microsoft, the merger discussions grew out of technology talks between the companies.

Over the last week, Andersen has reached out to each of its largest rivals about possible merger discussions.

At the same time Apple said it would remain independent and was "not currently in merger discussions with any part."

Both companies said that home- video distribution was one of the main reasons they struck up merger discussions.

Each has lost enough money to have provoked merger discussions between the two, according to executives familiar with the companies.

"I think the merger discussion is at an end," he said.

Based on its success, Odisei started merger discussions with partner 8x8.

Both companies said they would have no comment on reports of the merger discussions.

The stock has gained nearly 17 percent in the last four weeks as news of the merger discussions became public.