Yahoo, which continues to fight for its independent life against Microsoft and angry investor Carl Icahn, called the pair's recent move to break up the company "smoke and mirrors." In a memo to investors, the Web giant said it was open to a full takeover of the company for $33 per share and that it would also weigh a move for its search business "as long as it provides real value to our stockholders." Yahoo rejected Microsoft's latest offer late last week. In the letter, Yahoo pointed to its recent search partnership with Google and said that it was looking …

Kara Swisher thinks Microsoft is simply biding its time floating half-hearted proposals such as the one last week that would have seen the software giant acquire Yahoo's search business while instating Carl Icahn as chief of the leftovers. Why, because Microsoft knows that it needs more than Yahoo's search business to effectively compete with Google. Indeed, "it's also Yahoo's strong display advertising business that Microsoft is clearly after," Swisher says, citing "numerous sources within the company." As one says, "This is not just about search. It is about scale in all aspects of a market that is going to be …

The Microhoo circle of life keeps on turning. Following the latest failed attempt to bring the companies together, Reuters reports that Microsoft and Yahoo, in a huff, have parted ways and are now each pursuing a deal with Time Warner's AOL. Sound familiar? The same thing happened after Yahoo rejected Microsoft's initial $45 billion offer for the company back in February. Now, both companies are keen to have some kind of deal in place before Yahoo's Aug. 1 shareholder meeting. A Microsoft-AOL union would likely send Yahoo shares down even further, while an AOL-Yahoo deal might give CEO Jerry Yang …

After more than a week of rumors, Twitter, the microblogging sensation, has finally acquired Summize, the microblogging search engine. Silicon Alley Insider reports that the five-man firm sold for around $15 million in cash and stock. That's right, writer Peter Kafka says, stock: "A company that has no obvious business model but does have plenty of technology problems is now in the position to fund M&A with equity, thanks to a funding round that values the company at about $100 million." It all sounds a bit bubbly, doesn't it? As Kafka warns, "Either this thing is going to implode very …

Valleywag's Nicholas Carlson on Tuesday floated the rumor that Michael Arrington's blog TechCrunch will be imminently sold to Rupert Murdoch's News Corp. Carlson claims that a startup founder over the weekend overheard TechCrunch writers celebrating the sale of TechCrunch to News Corp.'s Fox Interactive Media unit. He said that the deal had been signed but won't be made public until TechCrunch's summer party. Another unnamed source corroborated the rumor, but News Corp. flatly denied that a deal was on. Carlson claims Arrington is desperate to sell, but joining FIM "makes little sense on the surface" because, for one thing, FIM …

GroupM Worldwide CEO Rob Norman, in a guest column for Ad Age, discusses the implications of a Google-Yahoo search partnership, saying it would lead to a "de facto consolidation" in U.S. search that would be bad for advertisers. "The per-click price of search will continue to rise if other channels deliver less volume and efficiency, and, if not capped by internal competition in the market, they will rise to a fraction below the costs of non-search channels," he writes. In other words, Norman is saying the cost of buying keywords will inevitably rise to the point at which search is …

Google, Yahoo and Microsoft execs met on Capitol Hill Tuesday morning to argue Yahoo's proposed search deal with Google before the Senate's antitrust committee. As expected, Google and Yahoo argued for the deal, which would result in Google controlling close to 90% of the search market, and Microsoft argued against it. However, the Los Angeles Times reports that Microsoft general counsel Brad Smith may have changed the dynamics of the dispute with an anecdote about a meeting between he, Microsoft CEO Steve Ballmer and Yahoo CEO Jerry Yang at the San Jose airport last month. Smith said that Yang …