Microsoft-Yahoo! Is Only Mostly Dead

SAN FRANCISCO -- Pundits have now written the obituary for the Microsoft(MSFT Quote)-Yahoo!(YHOO Quote) merger. But is it really dead forever?

The deal that Yahoo! shareholders so desperately wanted -- and Microsoft shareholders hated -- seems to have entered no-chance territory after Microsoft announced Thursday that the two companies couldn't reach any sort of deal.

Yahoo! investors quickly showed their dismay. The stock dropped 10% to end Thursday's session and was down another 6% in Friday trading.

Microsoft investors welcomed the news that a potential deal, with its attendant integration costs, was no longer a looming threat, adding $1.21, or 4.3%, to $29.45 in recent trading, for a two-day gain of $2.33, or 8.6%. ...