It seems that the Microsoft/Yahoo! saga is nowhere near over. It may only be a short while since Yahoo!'s rejection of Microsoft's proposed takeover, but now the two companies are parlaying over a possible compromise.Yahoo!'s been under a lot of pressure these last few months - and while this seems to have been driving them forward with new innovations, the shareholders might need a little more in the way of reassurance to keep their faith in the popular search engine.
Shareholder pressure certainly seems to be behind the negotiations - with news that investor Carl Icahn lobbied the Yahoo! board to enter talks with Microsoft again. The Wall Street Journal reported that the billionaire investor - who has 10 million shares and the option to buy 49 million more - also launched an attempt to replace the Yahoo! board of directors.
While Microsoft seemed willing to re-approach the table it will be interesting to find out what's on offer this time. In a statement released on Sunday the company indicated that they would not be making a full bid - they instead are considering an alternative that would involve a transaction without a takeover. They didn't rule out the possibility of a future acquisition offer, but the rumours circulating indicate that a deal focused on search advertising might be in the pipe-lines.
However, even the big-guns themselves are warning watchers not to assume that these talks will lead to a deal. Microsoft also said:
"There of course can be no assurance that any transaction will result from these discussions."
A sentiment well understood by the hoards of analysts, investors, interested observers and bigmouthmedia news hounds who've been following this dance with fascination.
While Yahoo!'s share of the market still outstrips Microsoft considerably, it's likely that the search provider's increasingly perilous position will be filling the internet giants with confidence. And the big question on our lips is how this reopening of talks will affect the potential Yahoo!/Google ad-alliance.
Yahoo! will have to tread carefully to avoid lowering their value to potential investors if they want to make the most of the interest sparked by this on-going search-saga.
