Microsoft may again be bidding for Yahoo, but this time for a minority stake in the company and in partnership with private investment firm Silver Lake Partners, according to reports.

AOL chief executive Tim Armstrong has said, meanwhile, that his firm does not plan to buy any Yahoo assets.

Yahoo has asked for bids to be submitted this week, according to Bloomberg. Other bids are expected to come from private investment firms Thomas H Lee Partners and TPG Capital, reports say.

Another report by DealBook has said that Microsoft will join forces with Silver Lake Partners and TPG Capital to secure 20 per cent of Yahoo.

All the firms involved in the bid have refused to give official statements, but the fact that Microsoft is making another offer for Yahoo would hardly come as a surprise.

Relationships between Microsoft and Yahoo have been far from stable in recent years but, even though Yahoo has fallen a long way from its status as an internet giant, Microsoft remains interested. Microsoft still basically wants Yahoo to compete better with Google.

Redmond attempted to buy Yahoo in 2008 for $44.6bn (£30bn) but was rebuffed. At that point Mcirosoft chief executive Steve Ballmer denied any chance of new acquisition talks and said that his firm had "moved on".

But Microsoft and Yahoo announced a 10-year search partnership in 2009 to allow them to compete with Google.

The deal was signed by Yahoo's new chief executive at the time, Carol Bartz, who was hired to turn Yahoo around after the firm's search market share had fallen sharply against Google's. Bartz was recently fired by Yahoo's board for failing to succeed with this strategy.

Bartz's priority was clearly to improve Yahoo's display advertising business, launching Rich Ads In Search, which let advertisers include images, video and location in adverts. However, problems with Bartz's strategy arose this year, as Yahoo's advertising business was not keeping pace with its rivals'.

Meanwhile, problems also arose with Bartz's 10-year search deal with Microsoft, and in April Yahoo attributed a 28 per cent profit slump to technical problems arising from the partnership.

Yahoo has hit back at claims from consumer group Which? that updated T&Cs on its new Mail service violate internet users' privacy and could lead to behavioural advertising by the back door.

The terms in question are Section c. of Yahoo Mail's Additional Terms Of Service which read: "By using the Services, you consent to allow Yahoo's automated systems to scan and analyse all incoming and outgoing communications content sent and received from your account (such as Mail and Messenger content including instant messages and SMS messages)."

Which? argued that "most consumers would be horrified to learn that their email can be read in order to open the door to targeted advertisers".

However, Yahoo contacted V3.co.uk on Monday to put its side of the story.

This seems to boil down to the fact that users are informed before they sign up via a pop-up notice that most of its competitors already have similar automated scanning in operation, and that the service will not lead to covert behavioural advertising but is primarily aimed at improving the user experience.

Such enhancements include recognising links to Flickr accounts in messages which will then automatically display photos in the body of the email, or directing automatically distributed mail such as newsletters into specific folders.

Undoubtedly customer information will be increasingly used by messaging providers to enhance their services and target relevant ads. The question is whether the benefits to the customer outweigh any lingering privacy concerns.

In most cases, as has already been proved most successfully by Google, they do. If you don't like the new Yahoo Mail, don't upgrade.