Yahoo! Rebuffs Microsoft's Advances

Still, Yahoo!, not Microsoft, may need more convincing. "We can certainly see why Microsoft would like to acquire Yahoo!," said Sanderson. "This was something they have considered in the recent past, but it is believed that Yahoo! rejected Microsoft's advance." Yahoo! Believes that it's "at the beginning of 'invigorating transformational change,'" Sanderson wrote.

But far from the beginning, Yahoo! management's efforts to take the company out of its malaise may be soon reaching the end of the line. Six months have passed since the company announced a dramatic restructuring and shakeout, and it has yet to find executives to fill key roles.

Yahoo!'s heavily anticipated Panama ad ranking system was released ahead of schedule during the first quarter, boosting the company's stock price at the start of the year. But shares crumbled after the company delivered a lackluster first quarter amid all the hype.

Yahoo! management has repeatedly said that the revenue-boosting effect of Panama will start to be felt during the second quarter. If this turns out to be characteristically underwhelming, Yahoo! may well find itself as part of Microsoft.

And then Yahoo! management may look back fondly at a time when it could have found a suitor on much more favorable terms.