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Microsoft and Yahoo, sans investment bankers

In their informal merger talks, the two companies were wise to leave the bankers out of the meeting room.

Keeping tabs on Microsoft's efforts to win Yahoo, Matt Karnitschnig of the Wall Street Journal reported Friday on some interesting events.

As reported Thursday in, the "radio silence" between the two companies has taken a shift and the parties have held informal merger discussions.

An interesting note in Karnitschnig's report is that the talks Monday in the Valley were held with only senior executives of the companies and no investment bankers from either side.

And while it's not unusual for executives to chat informally about "what if" merger scenarios without bankers and lawyers hovering about, it was a particularly smart move on Microsoft's part, said one former banker.

"Given they already have this offer out there, the dynamics are very different," the former banker told CNET "By having bankers there, it lends an air of formal negotiations. Microsoft is trying to get Yahoo to buy into the concept of a combined business and then hope they'll be more willing to's like trying to win the hearts and minds of the enemy. And with the bankers there, it's seen as more of a negotiating tactic than a friendly olive branch."

And while the Journal report notes that no other meetings between the companies have been scheduled since Microsoft gave its outline of the combined companies, that's not to say the folks in Redmond don't foresee another trigger point ahead.

One source familiar with the talks told CNET on Wednesday that Microsoft will keep a keen eye on Yahoo's upcoming first-quarter results, when the Internet search pioneer reports its financial performance on April 22.