Yahoo! Loses Power Play

And with the explosion of the lucrative paid-search market, AT&T well may be able to receive money rather than give it. AT&T brings traffic to Yahoo!, and in search-marketing, more traffic leads to more click-throughs and more revenue. Deep-pocketed Google, for example, revels in pointing out that it paid $3 billion to its partners last year, many of which drive traffic and search volume for the company.

Of course, pulling the plug on Yahoo! and taking its business elsewhere would come at a cost to AT&T. Many of its customers are used to Yahoo!'s service, and the companies have invested considerably in developing products together.

The best outcome for AT&T would be a situation in which it continues doing business with Yahoo!, but on more generous terms. Leaks in the press threatening a walkout -- and jolting Yahoo!'s stock in the process -- would be a great way to re-establish the roles.

By publicly talking up how cozy its relationship is with AT&T, Yahoo! may have inadvertently put even more on the line when it comes to making sure AT&T sticks around. AT&T will end the day with more leverage, because a breakup now would seem even more of a black eye for Yahoo!

Some sort of partnership between Yahoo! and AT&T likely will limp along. But from now on, AT&T is in the driver's seat. And while Yahoo! probably will make sure everything appears to be humming along on the surface, it will be impossible to hide the new order as it pertains to the bottom line.