Updated: Microsoft Discussing Transaction With Yahoo; Yahoo ‘Open’ To Talks; Not Necessarily A Sale

imageWith Carl Icahn pushing to get the two sides back into talks, Microsoft (NSDQ: MSFT) has issued a statement on where it stands with Yahoo (NSDQ: YHOO). It’s a bit cryptic: The company says it has proposed an “alternative that would involve a transaction with Yahoo! but not an acquisition of all of Yahoo!” The purpose of such a transaction would be to improve its online services and advertising business — the same reason it would buy the company outright. It says it is not making a new bid to acquire Yahoo at this time, but that it “reserves the right to reconsider that alternative depending on future developments and discussions that may take place with Yahoo! or discussions with shareholders of Yahoo! or Microsoft or with other third parties.” So that clears that up. Release.

Could it be that the specter of a showdown with Carl Icahn made Microsoft look a lot more friendly in Yahoo’s eyes? More after the jump…

Could Icahn and his band of frustrated investors possibly be happy with some deal that’s not an outright sale? One possibility: A JV of some sort involving Microsoft’s consumer-facing online services. Kara Swisher at AllThingsD offers a different possibility: “The software giant would not give details, but sources at both companies said it involved Microsoft buying Yahoo