Yahoo and Microsoft have struck a non-disclosure agreement that could be the precursor to Redmond finally making a renewed offer for some or all of the ailing internet pioneer after it was rebuffed in 2008.
Widespread reports suggest that the agreement will allow Microsoft to analyse Yahoo's financials in greater detail, something that a handful of private equity firms such as Silver Lake are already doing.
The ailing internet firm has become a target for such groups given its increasingly precarious position.
It is currently reviewing its strategic options, one of which could be the break-up and sale of the firm, although activist investors have been increasingly vocal in calling for co-founder Jerry Yang to leave the company and take no further part in the negotiations or management team.
Adrian Drury, practice leader for Consumer Impact IT at analyst Ovum, argued that the deal with Microsoft doesn't necessarily mean the Redmond firm is looking to buy now, but that it is merely protecting its investment, after the 10-year search deal it struck with Yahoo.
"Yahoo is important to Microsoft's advertising business and it wants to make sure it knows the value of the business if it needs to step in and protect its investment," he told V3.
"It's unfortunate that it has been reported as an aggressive attack on the Microsoft side to take over Yahoo when the reality is it's having to be somewhat reactive here."
Drury said that should Microsoft wish to progress with an acquisition of some parts of Yahoo's business it could do it alone or as part of a consortium, but cautioned that it was still too early to predict what might happen.
"We are at move three in a 100-move game of chess. There are a whole load of potential outcomes," he added.
Microsoft was famously knocked back three years ago when it tried to acquire Yahoo for $45bn.
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