Microsoft considers new Yahoo deal

Microsoft is talking to Yahoo! about an alternative transaction that doesn't involve an acquisition, the world's largest software maker said Sunday.

The announcement comes two weeks after Microsoft abruptly stopped its pursuit of Yahoo, withdrawing a sweetened $46 billion offer and saying it would not make a hostile bid for the Internet company.

"Microsoft is considering and has raised with Yahoo! an alternative that would involve a transaction with Yahoo! but not an acquisition of all of Yahoo!," a Microsoft statement said Sunday. "Microsoft is not proposing to make a new bid to acquire all of Yahoo! at this time, but reserves the right to reconsider that alternative .... There of course can be no assurance that any transaction will result from these discussions."

In response, Yahoo issued a statement in the evening, saying the company "has confirmed with Microsoft that it is not interested in pursuing an acquisition of all of Yahoo! at this time."

The statement goes on to say, Yahoo is open to "pursuing any transaction which is in the best interest of our stockholders," and that the company would be willing to evaluate alternative transactions, including "any Microsoft proposal."