Microsoft raises possibility of an alternative transaction with Yahoo

Microsoft Corp. is once again trying to team up with Yahoo Inc. to challenge Internet search and advertising leader Google Inc., although at this point the renewed talks haven't escalated to another attempt to take over Yahoo. The Redmond, Washington-based software maker disclosed the revived discussions Sunday without providing any specifics about the nature of the deal being explored except to say it involved bolstering the companies' position in the online search and advertising markets. "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," the statement said. Microsoft emphasized that it hasn't resurrected a $47.5 billion takeover bid that its chief executive, Steve Ballmer, withdrew after Yahoo CEO Jerry Yang - acting on behalf of Yahoo's board - demanded an additional $5.5 billion. But Microsoft left open the possibility that it might dangle another buyout offer of Yahoo, depending on how the discussions progress between the two companies and their respective shareholders.