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Yahoo! CEO Ready to Resume Microsoft Talks

"While the implementation of the services agreement with Google would have enabled Yahoo! to accelerate its investments in its top business priorities through an infusion of additional operating cash flow, this deal was incremental to Yahoo!'s product roadmap and does not change Yahoo!'s commitment to innovation and growth in search."

Yahoo! had estimated the search deal would result in about $250 million to $450 million in incremental operating cash flow in its first year, with the potential to generate about $800 million in annual revenue.

Now all eyes are back on Microsoft, considered by many as Yahoo!'s last hope. Indeed, Yahoo!'s stock was climbing almost 6% to $14.15 in recent trading -- its highest level in a month -- on rumors that Microsoft would swoop in and make another bid.

If true, Microsoft would face a vastly different landscape from earlier this year, when it offered $33 a share for Yahoo!. Back then, Yahoo! accused Microsoft of undervaluing its assets but now it seems highly unlikely that another proposal would come anywhere close to the original bid.

Echoing his previous public comments, Yang said late Wednesday he believes a compromise on the sales price could have been reached if Microsoft hadn't ended the talks so abruptly, according to the AP.

Last month, investor Mithras Capital, which owns 1.9 million shares of Yahoo!, suggested a price of $22 a share but recent speculation puts the number closer to $19 or $20 a share.

Chris Boova, an investment officer at J. & W. Seligman, says that at one point, Yahoo! had considered an arrangement with Google to be a much better alternative to a Microsoft merger. But now it may be time for the company to take another look.
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