Google is not likely to finance a buyout of Yahoo! without getting an equity stake as part of the deal, said a source close to the situation.

At the same time, antitrust regulators would likely frown on any deal that would give Google a stake in a rival, the source said. “Google is not in the lending business,” the source added.

The tech juggernaut might be better off allowing Microsoft to buy Yahoo! so that the number of competitors in the space is reduced from three to two, the source said.

The Wall Street Journal reported this weekend that at least two private equity firms had spoken to Google about borrowing money from it to finance a bid for Yahoo!, and they were in early stage discussions.

Yahoo! last week told suitors that they could not, for now, team up on a bid.

But for private equity firms in a tight financing market, buying Yahoo!, with its $20 billion market cap, would be difficult without help outside of traditional bank sources.

A Google spokesman did not return calls.