What about Microsoft's "alternative transaction"?

Negotiations by press release can be tricky. While Yahoo grabbed headlines and shook markets on Thursday with its declaration that all official talks in the Yahoo/Microsoft acquisition have "concluded," Microsoft's brief statement about Yahoo on the same day made pains to say it's still interested in something:

"As stated on May 3rd and reiterated on May 18th Microsoft was not interested in rebidding for all of Yahoo!. Our alternative transaction remains available for discussion."

"Our alternative transaction" could only be the behind-the-scenes proposal made in mid-May, apparently for Yahoo's search business. Of course, that's no longer possible from Yahoo's point of view. Not only did Yang et al reject a spinoff outright in Yahoo's announcement on Thursday, but also the company has other big plans for search, starting with the new "non-exclusive" advertising deal with Google. If that's not a clear enough "no" to Microsoft, Yahoo has also agreed to a poison pill provision in the ad deal -- a $250 million "termination fee," payable to Google, "if the agreement is terminated as a result of a change in control that occurs within 24 months."

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