Redmond may be interested in a second run at buying the troubled Internet portal, though this time it may have more competition.
Microsoft is considering a second run at Yahoo.
Reuters, citing anonymous sources, reported today that Microsoft is weighing a potential bid for Yahoo, and may enlist a partner to help close the deal. Yahoo investors welcomed the report, sending shares up $1.46, or more than 10 percent, to close at $15.92.
But a bid may not materialize as there are still different factions within Microsoft that disagree on whether the company should acquire Yahoo, Reuters reported.
Microsoft joins a number of companies that are eying Yahoo, which said in an internal memo that it is fielding inquiries from multiple parties, a tacit acknowledgement that it was open to sell.
• Microsoft, Yahoo, AOL to sell one another's ads
• Could Yahoo be acquired by Alibaba?
• BNET: Microsoft takes another look at Yahoo in the bargain basement
The potential acquirers range from Chinese Internet company Alibaba to a number of private equity firms such as Silverlake Partners and venture capitalists Andreessen Horowitz.
This would be a renewed attempt by Microsoft, which in February 2008 made an offer to Yahoo, only to be rebuffed by management and founder Jerry Yang in a protracted corporate soap opera. By July 2009, the two companies made nice in a lesser deal that put Yahoo search in Microsoft's hands.
Microsoft has shown a recent willingness to spend big on acquisitions, including its $8.5 billion purchase of Skype in May and the $6 billion takeover of advertising software provider Aquantive in 2007.
In September, Microsoft, Yahoo, and AOL said they would be joining forces in a combined ad sales effort.
Updated at 3:40 p.m. with closing stock price.