After a major shareholder began pushing a Microsoft (MSFT) - Get Report deal early Wednesday, Yahoo!'s (YHOO) long-term strategy and its search for a CEO are again coming under intense scrutiny.

In a letter to the company's board Wednesday,

Ivory Investment Management

proposed a deal in which Microsoft would acquire Yahoo!'s search engine and Yahoo! would retain 80% of revenue generated by search queries on its own site.

"This deal would offer Microsoft the unique opportunity to immediately gain critical mass to better level the playing field with Google, while it would simultaneously allow Yahoo to both receive a sizable upfront cash payment and increase its prospective cash flow," wrote Curtis Macnguyen, Ivory's managing partner.

Ivory, which owns 1.5% of Yahoo!, proposed that Microsoft pay $15 billion for the search platform. The deal would give Yahoo shareholders $24 to $29 per share, it said.

The Sunnyvale, Calif.-based company's stock rose $1.21, or 9.93%, to close at $13.40, outpacing a modest rally in tech stocks in which the Nasdaq crept up 1.17%.

A Yahoo! spokeswoman declined to comment when contacted by

Wednesday, although analysts have already identified the benefits of a Yahoo!-Microsoft deal.

Jefferies & Company analyst Youssef Squali, for example, explained in a Dec. 2 research note that a deal would open new revenue streams.

"A deal would lock-in high guaranteed annual revenues and EBITDA for Yahoo, and re-focus it on its long-term opportunity in display

advertising and content," he wrote.

Yahoo's board has already rejected a

$47.5 billion bid

from Microsoft to acquire the company, much to the chagrin of activist investor

Carl Icahn


Yahoo!, which recently disclosed plans to


about 10% of its 15,000-strong workforce is, however, currently without a CEO after

Jerry Yang

recently vacated the role.

Yang stepped down shortly after Yahoo!'s attempt to forge an advertising partnership with


(GOOG) - Get Report

came to nothing, although at least one analyst thinks that a Microsoft deal could now be in the cards.

Gene Munster, an analyst at

Piper Jaffrey


Bloomberg TV

that a search deal, potentially with Microsoft, will be a top priority for

whoever fills

Yang's shoes.

"The search sale is, I think, probably the first step," he said. "Yahoo has acknowledged, by wanting to do a deal with Google a few months ago, that they are not core in search."

Munster added that Yahoo! needs to appoint Yang's successor sooner rather than later.

"They have got to move fast," he said. "Yahoo is a good property -- it's the most visited Web site in the world, so every day that they wait, some of that mystique and some of that strength drain slightly."




CEO Bruce Chizen could be a good outside bet for the Yahoo! helm, according to Munster.

"One of the big outsiders that not a lot of people have talked about is Bruce Chizen," he said, adding that the former Adobe CEO has great media experience.



(VOD) - Get Report

CEO Arun Sarin has also been floated as a possible replacement for Yang, and there have also been rumors that a Google executive with strong sales experience could be in line for the role.