Microsoft Holders Moody After Yahoo! Reprise

Although the terms of Microsoft's proposal are pure speculation, says Forrester Research analyst Charlene Li, it's a question of how much access to Yahoo!'s search business Microsoft can get, either by buying or contracting for it. Buying Yahoo!'s ad and search technology would leave Yahoo! as a content provider, which would not be a bad thing, Li says. "They're a much better media company than technology company."

With shareholders breathing down the company's neck, Yahoo! may well be motivated to accept this proposal, which is at least Microsoft's third to date.

With Google, Yahoo! would find it hard to raise the kind of money it needs to hold off the shareholder revolt, Li said. "Yahoo! is running out of options."