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Report: Microsoft and Yahoo executives meet again

Microsoft and Yahoo executives took another run at trying to ignite formal merger talks this weeks, according to The Wall Street Journal.

Microsoft and Yahoo executives took another run at trying to ignite formal merger talks this week, but failed to kick it into gear, according to a report in The Wall Street Journal.

Apparently, Microsoft says no dice to raising its buyout bid and Yahoo remains hesitant to open its books without a bump up in price, according to sources cited in the Journal.

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Although it's unclear which executives are doing the merger dance, the meeting was held near Yahoo's headquarters, the report states.

The parties last talked four weeks ago, marking the end of what had been six weeks of silence since Microsoft threw out its unsolicited buyout bid valued at $31 a share at the time.

Yahoo later rejected the offer, saying it undervalued the company.

But maybe Yahoo should have been sitting in on a presentation Thursday at Tulane University Law School by Mark Shafir, one of the top merger and acquisition chiefs at Lehman Brothers--an investment bank that is also representing Yahoo alongside Goldman Sachs as it sorts through its options.

According to the Journal's Deal Journal blog, Shafir had a few dire predictions about the state of large merger and acquisition deals.

"We don't see access to capital for large deals any time soon," Shafir is quoted saying in the report. "Credit is difficult even for the very well-heeled folks."

That may put a damper on white knight scenarios of an outright acquisition for Yahoo, outside of the Microsoft offer.

Shafir, according to the report, also noted that M&A deals are expected to skid to $2.7 trillion this year, compared with $4.2 trillion last year. And strategic buyouts, like the one Microsoft wants with Yahoo, are expected to plummet by approximately 30 percent. Ouch.

Venture capitalists, meanwhile, are also bracing for a dour economy, notes CNET Stefanie Olsen in her blog.

Yoo-hoo Yahoo, what do you think?