Microsoft, Yahoo, Google, and Facebook: War of the Worlds II

Yesterday, Microsoft issued a statement to publicly acknowledge that they hadn't lost interest in Yahoo!. Instead of a hostile takeover, Microsoft may be going after Yahoo from an entirely different angle and the industry is buzzing with exactly what angle Microsoft intends to pursue. Here's a look at the statements by Microsoft and Yahoo, and what industry leaders have to say.
Exploring Alternatives

Microsoft has issued a public statement that they will continue to explore alternatives. While Microsoft notes of possibly venturing to third parties, they haven't taken their eyes off of Yahoo! yet. Instead Microsoft intends to talk with Yahoo and explore alternative angles to their former strategy. With little to no reassurance that any transactions will result, Microsoft states that:

    In light of developments since the withdrawal of the Microsoft proposal to acquire Yahoo! Inc., Microsoft announced that it is continuing to explore and pursue its alternatives to improve and expand its online services and advertising business. Microsoft is considering and has raised with Yahoo! an alternative that would involve a transaction with Yahoo! but not an acquisition of all of Yahoo! Microsoft is not proposing to make a new bid to acquire all of Yahoo! at this time, but reserves the right to reconsider that alternative depending on future developments and discussions that may take place with Yahoo! or discussions with shareholders of Yahoo! or Microsoft or with other third parties.

Yahoo!'s Response

To ensure that things would go over smoothly on Yahoo!'s end, Yahoo! also issued a public statement about the talks:

    Yahoo! has confirmed with Microsoft that it is not interested in pursuing an acquisition of all of Yahoo! at this time. Yahoo! and its Board of Directors continue to consider a number of value maximizing strategic alternatives for Yahoo!, and we remain open to pursuing any transaction which is in the best interest of our stockholders. Yahoo!'s Board of Directors will evaluate each of our alternatives, including any Microsoft proposal, consistent with its fiduciary duties, with a focus on maximizing stockholder value.

What really stands out about this statement is the following line:
"[...] Microsoft that it is not interested in pursuing an acquisition of all of Yahoo! at this time."

Microsoft may no longer want all of Yahoo!, but Yahoo!'s search engine would be a very nice "alternative".
More Buzz

Leading industry experts are abuzz with news of what's really going on between Microsoft and Yahoo. Kara Swisher of Boomtown makes a note of an internal Microsoft memo with a strategy update from Kevin Johnson the president of the company's Platforms & Services division. The memo gives a little more insight into Microsoft's strategy for Yahoo, concluding that they can compete.

Source : http://www.readwriteweb.com/archives/msyahoo.php