There has been some casual discussion between the 49ers and the representatives for quarterback Alex Smith about a potential contract extension for the quarterback, but talks haven't really progressed yet to the substantive stage.
For all the talk about how the Niners might be one of the teams interested in Peyton Manning if (when?) he is released by Indianapolis, the preference seems to be re-signing Smith to a long-term contract. He signed only a one-year deal for 2011.
One of the big questions besides the obvious one, money, is the term of the contract. There are rumblings San Francisco officials prefer a three-year contract, while Smith's camp would like something longer, more like five years.