For those of you who haven't heard, Google has walked away from the Yahoo! Advertising deal, realising that it wasn't a battle worth fighting.

The major loser from the decision is Yahoo! The deal promised a revenue opportunity that the search engine desperately needed. It was a glimmer of hope for Yahoo!'s shareholders who have been bitterly disappointed over the last few years.

So rather than "cry over split milk", Yahoo!'s CEO Jerry Yang was quick to move into plan B (or C or D), with the comment "To this day the best thing for Microsoft to do is buy Yahoo."

Talking at the Web 2.0 summit, Jerry continued with:
"...I don't think that is a bad idea at all...at the right price, whatever the price is, we are willing to sell the company...We were ready to negotiate, we wanted to negotiate a deal, and we felt that we weren't that far apart. But at the end of the day, they withdrew and they since have been very clear about not wanting to buy the company."



Well, that was then and this is now. There's no denying the world is a radically different place (economically) to what it was when the Microsoft walked away from Yahoo! Acquisition talks.

Yahoo! really has its back up against the wall, and with its share price about 25% lower than it was when the offer was made, it could be a good time for Microsoft rekindle discussions.

Neither of the search engines are making any real inroads into Google's ascendancy on their own, so potentially combined - they can offer some serious competition.

I would expect to see this discussion gather momentum, as it's a matter of striking while the iron is hot. For Microsoft, the price is right - For Yahoo!, they're desperate to sell!

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