Leave it to billionaire investor Carl Icahn to leverage a) a threat to gut Yahoo’s board and b) support from the likes of hedge funds Paulson & Co. and Eton Park Capital Management to bring Microsoft back swinging. Read on for more about whether anyone actually thinks this is headed anywhere. And if you’re trading the stock of either Yahoo or Microsoft (or their competitors) today, fasten your seatbelt. It’s going to be a bumpy ride.

Microsoft Corp. said it has resumed its effort to team up with Yahoo Inc. -- and reopened the door to the possibility of making a new bid for the Internet company.

According to people familiar with the matter, Microsoft has proposed to Yahoo a deal related to advertisements that run next to Internet search results, a large business that is dominated by Google Inc. The move by Microsoft appears to be an attempt to stop Google from entering a search-related deal with Yahoo that's now under discussion and could be announced in coming days.

In a statement, Microsoft said only that it has raised with Yahoo the possibility of a "transaction" that isn't an acquisition of all of Yahoo, and declined to be more specific. However, Microsoft also said in the statement that it "reserves the right to reconsider" the possibility of a bid for the company, depending on developments or talks with Yahoo or its shareholders or other parties.

The language in the statement, while vague, appears to represent a notable shift in Microsoft's stance. In recent days, Microsoft had told Yahoo representatives that it no longer intended to pursue a takeover of the company, according to people familiar with the matter.

In a statement, Yahoo said that it "has confirmed with Microsoft that it is not interested in pursuing an acquisition of all of Yahoo at this time." But Yahoo added that it remains "open to pursuing any transaction which is in the best interest of our stockholders." The company said its board will review its alternatives "including any Microsoft proposal."

The maneuvering highlights the pressure on Microsoft to find new options to compete more effectively with Google in online advertising.

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