Microsoft’s MSN is in preliminary talks with MySpace about using the social networking site’s music service, MySpace Music, to power music offerings on the giant portal.

While sources at both companies cautioned that the talks are still early, Microsoft–which has its own music site that it programs with original and partnered content–execs are interested in goosing its offering.

That’s because MSN Music consistently ranks substantially lower than other big online music properties in terms of traffic, while MySpace Music is always near the top.

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According to sources close to the situation, AOL has been busy selecting the board for the company, which is still set to spin itself off by year’s end–even as it slows down a decision on a new search deal with either current partner Google or a more emboldened Microsoft.

AOL is using Spencer Stuart in the search for directors, led by well-known headhunter Jim Citrin, sources said, and the company has already settled on several outside candidates.

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In a risky but interesting move that has some at the company nervous and others excited, Yahoo is in the process of moving key development responsibility for its juggernaut Yahoo News unit to Taiwan.

Under the new system, product management, engineering and user interface design for one of Yahoo’s flagship properties will become the responsibility of staffers there.

Editorial employees for Yahoo News–which is the No. 1 news site on the Web with 48.4 unique monthly visitors, according to comScore data –will remain in the U.S., largely located at its Santa Monica, Calif., office.

Yahoo confirmed the change to BoomTown yesterday.

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Although it’s not news that Yahoo was readying a new version of its homepage and has spent a lot of time doing so–in fact, it’s gone all Handy Manny with a whole lot of test renovations–the Internet giant begins the massive rollout of it tomorrow.

The official launch of what was code-named “Metro,” which Yahoo had previously said was coming in the fall, will take place on an opt-in “beta” basis for the hundreds of millions of users in the U.S. and will be extended to France, the U.K. and India later this week.

The change is an important one for Yahoo, since its front page–one of the most trafficked on the Web–is perhaps its most powerful calling card to users and advertisers, as well as to Wall Street.

Here are the details and also an interview about it all with Yahoo SVP Tapan Bhat, as well as screenshots of the new page.

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The edging-ever-closer-to-consummation deal talks with Yahoo about an online advertising and search partnership and the aggressive marketing of its new Bing search service aren’t the only things going on for Microsoft’s online services business.

MSN, Microsoft’s online portal, is also preparing a major redo of what U.S. and, possibly, international consumers will see, as it doubles down on five key content verticals, while cutting back on others.

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Yahoo’s SVP of Northern American Audience, Jeff Dossett, is leaving the company.

Reasons for the departure are personal, said sources, who said that Dossett is most likely to do a start-up.

Dossett did not return emails asking for comment, but Yahoo confirmed his resignation to BoomTown.

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Will Yahoo’s media properties fall flat with sweeping new changes that are afoot that will drastically change the way the company bakes its content offerings?

Or will the ability to have a single, highly scaleable, centrally developed architecture make the media programming Yahoo delivers more responsive and flexible in the era of fast-twitch bloggers (all while cutting costs)?

According to many sources inside and outside the company, product development for Yahoo’s heavily trafficked media operations–including its powerful News, Finance and Sports sites–is set to be moved under Ash Patel, who is EVP of the company’s Audience Product Division.

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A lot has been written about the need for drastic layoffs at Yahoo, including reports that the troubled company was laying off from 3,000 to 3,500 of its 15,000 employees.

As dramatic as that figure is, according to numerous sources, it’s more likely that Yahoo will cut only half that, beginning sometime in mid-December.

Why? Well, because what Yahoo’s top brass has already done is given its managers cost-cutting targets and not specific marching orders on laying off a certain number of people across the board. Thus, cuts could be made to programs, projects and other things, as well as staff.

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