Yahoo board to debate deal options

Yahoo's board is expected to debate on Friday its various options for cutting a deal with Microsoft, AOL-Time Warner, and Google, according to a report in The Wall Street Journal.

And while Yahoo's board is expected to discuss its options--with many insiders still seeing a Microsoft deal, sans the participation of News Corp., as the most likely outcome, the WSJ says--no major decisions are anticipated. But that may change next week, the report notes, citing a source familiar with the issue.

Yahoo is under great pressure to either engage in formal talks with Microsoft or find an attractive alternative within the next two weeks. Microsoft, , issued an ultimatum last weekend that called for Yahoo to close a deal with the software giant in the next three weeks, or face a hostile battle that would entail a proxy fight, exchange offer and possibly a lower buyout bid.

While Microsoft appears to have maintained its favorite-son status with investors and Wall Street analysts, a flurry of news reports Wednesday pointed to a possible Yahoo-AOL transaction involving Google could be in the works.

Speculation also surfaced Wednesday that Microsoft may draw News Corp. into a Yahoo deal, but the Journal, citing sources, noted a Microsoft-Yahoo deal would likely occur without News Corp. hanging around.

In the meantime, eyes are on Yahoo for its next volley into Microsoft's court.