Microsoft renews its focus on Yahoo

Microsoft appears to have renewed its interest in Yahoo

Microsoft has made an undefined new business offer to Yahoo as an alternative to its failed takeover bid.

The new deal, as revealed in a public statement yesterday, would not involve a complete buy-out. Further details of the proposal have not been revealed.

"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, " said the statement.

Microsoft also said that it was no longer pursuing a complete purchase of the search firm, but did not rule out returning to this strategy in the future.

Yahoo's own public response failed to reveal any further information on the deal, but once again restated the company's openness to Microsoft's attention.

"Yahoo has confirmed with Microsoft that it is not interested in pursuing an acquisition of all of Yahoo at this time," said the statement.

"Yahoo and its board of directors continue to consider a number of value maximising strategic alternatives for Yahoo, and we remain open to pursuing any transaction which is in the best interest of our stockholders."

The firm is dealing with the threat of a shareholder revolt, following billionaire investor Carli Icahn's decision to nominate 10 possible replacements for the company's governing board.

A further concern will be AOL's $850m (£434m) purchase of social network Bebo, which was completed today. The agreement threatens to cut Yahoo out of its lucrative position as the sole handler of adverts for the UK and Ireland versions of the popular Web 2.0 site.