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More than a week after it started, speculation that



is interested in Internet service provider



continues to fly through the market.

EarthLink's announcement Friday that part-owner


( FON) had agreed to end a partnership deal has only increased analysts' suspicion that something is in the works with Microsoft.

"Sprint is basically saying, We will step aside and you can seek a stronger partner," said analyst Fred Moran with

Jefferies and Co.

Moran upgraded EarthLink to buy from hold Friday. (Jefferies has done underwriting and has provided M&A guidance for EarthLink.)

According to the announcement Friday, Sprint, which owns 27% of EarthLink, will no longer have the right to buy the rest of the ISP, though it will retain the right to match any offers. It will also end the co-branding of some products.

Sands Brothers

upgraded EarthLink to buy from neutral today, with analysts Jim Waggoner and David Zale writing that ending the Sprint deal frees up EarthLink for others, including acquisition by Microsoft or Yahoo! (Sands Brothers has no underwriting relationship with EarthLink.)

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Goldman Sachs

analyst Vik Mehta also sees the end of the Sprint deal as a positive, saying it gives EarthLink the flexibility to make new partnerships.

After shooting up briefly last week, shares of EarthLink settled some, ending the week up about 3.1%. In recent trading, EarthLink was down 25 cents, or 2.7%, to $9.

Merrill Lynch

analyst Henry Blodget wrote today that while a partnership between the two would be good, it would still have a subscriber base only one third the size of

AOL Time Warner's


and thus would not be a serious competitor.

Speculation first

surfaced last week that Microsoft might be interested in EarthLink after the Redmond, Wash.-based software behemoth announced that it was ending its $400 PC rebates for MSN subscribers.

The thinking went that Microsoft and its MSN service would benefit by buying EarthLink, gaining access to its list of 4.7 million subscribers and to its agreement with AOL Time Warner for use of the cable lines for high-speed Internet access.

Chatter also touched on free Internet access providers


( JWEB) and



. Juno ended last week up more than 42%. NetZero was down 13.5% for the week.Today Juno was trading down 14.3% and NetZero was unchanged.

Moran said that Microsoft's interest in those Internet providers' ad-supported service was likely to be lower than in EarthLink's paying subscriber list.

"I think they're not likely to be involved. If they do something with EarthLink, then they might look to do it afterwards," Moran said.