Microsoft-Yahoo: A New Spin

Two weeks after withdrawing its bid for Yahoo, Microsoft has returned with another proposal: acquire only a portion of Yahoo.

Microsoft, in a statement, said it continues to “explore and pursue its alternatives to improve and expand its online services and advertising business.”

The Wall Street Journal, quoting unnamed sources, reports Microsoft’s proposal would involve Yahoo display ads sold by Microsoft next to Yahoo search results. According to The Wall Street Journal-owned blog AllThingsD, an acquisition by Microsoft of Yahoo’s entire search business may also be in the offing. The proposals appears to be partly in response to Yahoo’s decision to test Google ads on its own search results pages.

Yahoo, in a carefully worded news release titled, “Yahoo! Remains Open to Value Maximizing Transactions,” said it “confirmed with Microsoft that it is not interested in pursuing an acquisition of all of Yahoo at this time.”

Yahoo said it intends to evaluate alternatives, including any proposal from Microsoft, that would be in the best interest of stockholders.

This latest development comes days after Yahoo investor Carl Icahn made noise to launch a battle and replace Yahoo board members with an alternate board unless talks are renewed with Microsoft.