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Yahoo feeling the Microsoft nudge

Time: 23:54 EST/04:54 GMT | News Source: CNET | Posted By: Kenneth van Surksum

Yahoo shares edged up Tuesday as analysts and the company's own major shareholder and director Carl Icahn said they longed for the Internet search pioneer to entertain a search-only deal with Microsoft.

That recommendation followed reports Monday that Yahoo and Google have dramatically watered down their initial search advertising proposal, as a means to gain approval from federal antitrust regulators.

Analysts with Sanford C. Bernstein & Co. said in a research note that Yahoo should dump its Google deal and turn its attention back to Microsoft, which previously had offered as much as $33 a share for the entire company and later came back with a search-only acquisition offer. Both deals were rejected by Yahoo.

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