In an official press release, Microsoft has announced its plans to return to the discussion table with Yahoo. This time the focus has been shifted from total acquisition to alternative, limited methods of cooperation. Sources are reporting Microsoft considers displaying ads next to Yahoo search results.

From the press release:
"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! 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 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."

When Yahoo's board of directors rejected Microsoft initial acquisition bid in the beginning of May, the company's stock immediately lost 20% of its value. To make matters more complicated, a number of influential shareholders, lead by billionaire Carl Icahn, started a campaign to replace Yahoo's current board of directors and change the company's course towards a merger with Microsoft.

If this new ad arrangement is accepted, then the combined Microsoft-Yahoo ad service will compete with Google AdSense for dominance in the lucrative online contextual advertising market. For now, things are not going well for Yahoo, as Techcrunch reports the company is likely to lose a big advertising contract with major social network Bebo.