Yahoo! Loses Power Play

In other words, the alliance may hobble along, but a serious change in its terms is in the works.

Moreover, while the news jolted Yahoo!'s stock price, AT&T's stayed unmoved. This signals that the market believes AT&T will be just fine selling DSL connections without Yahoo!'s help, and again underscores that Yahoo! now needs AT&T more than the other way around.

In fact, far from denouncing the Journal report, it hardly would be surprising if AT&T played a role in fostering it. Earlier this week, Google(GOOG Quote) CEO Eric Schmidt mused about his experience negotiating with old-media companies, for which leaking to the press to pressure the other party was almost protocol.

"The source of the comments for the article likely came from AT&T (could be negotiating tactic)," Merrill Lynch analyst Justin Post wrote in a research note on Monday morning. Merrill makes a market in shares of Yahoo!.

AT&T has every reason to re-evaluate the terms of its deal with Yahoo! and push harshly for concessions. A lot has changed since 2001, when the deal was originally signed. Then, Yahoo!'s popular, user-friendly services were a big help in persuading Web surfers to pay extra for high-speed instead of dial-up service.

Now, broadband connections have instead become the de facto standard instead.