Report: Microsoft Mulling Yahoo! Bid

Shares of Yahoo!(YHOO Quote) dipped in after-hours trading Friday following a published report that Microsoft (MSFT Quote) was "evaluating" its buyout offer of the Internet portal firm due to worsening market conditions.

Yahoo! was recently off more than 5% to $26.91 following a Reuters headline that ran shortly after the close of the regular trading session.

Reuters, citing a source familiar with the situation, said "changes in Yahoo's business may have dragged down its value below what it was when Microsoft made its $44.6 billion bid."

The news is just one more log on the "will-they-or-won't-they" debate as to whether Microsoft's original $31-a-share offer for Yahoo! will come to fruition without a change in terms.

Indeed, it's not out of the question that Microsoft's "evaluation" is just another negotiating tactic along the way, designed to boost its leverage over Yahoo!, which seems otherwise out of options beyond trying to get a sweeter deal from Microsoft.

It appears less than coincidental that Friday's report follows yet another meeting this week between management of the two companies -- which reportedly made no progress.

That said, the general consensus continues to be that a deal here ultimately gets done - at a higher price for Yahoo! shareholders.

Shares of Microsoft were recently up 44 cents to $29.60.