Yahoo! Inc.'s [YHOO] stock price has held up surprisingly well. Trading at $26.07 midday, its shares are only modestly below their closing price of $26.81 on May 1, the session before they rallied on talk that Yahoo! and Microsoft Corp.  [MSFT]. were close to a deal. The price is even more surprising given the reports that Yahoo! plans to outsource its search advertising to Google Inc. [GOOG] may be premature. If that deal is on the backburner, there's little else to support Yahoo!'s stock unless investors are counting on it renewing talks with Microsoft.

Yahoo! has come under fire from shareholders after Microsoft withdrew its offer over the weekend. In the fallout, Yahoo! execs have postured to suggest they were open a deal for even less than the $37 a share, or $53.2 billion, counteroffer they reportedly made to Microsoft's $33 a share, or $47.5 billion, offer.

But If Yahoo! really has indicated to Microsoft that it would accept $34 a share offer, which comes to $48.9 billion, a deal could still come together quickly. Not that it would be simple. Yahoo! has had plenty of time to come to terms. Meanwhile, with Yahoo! shares poised on the precipice, Microsoft arguably has more leverage than it has during the entire saga, which means it can better dictate terms. Microsoft can let Yahoo! sweat it out until the Internet company's annual meeting in July, when shareholders are likely to be in a lather. -- David Shabelman

See May 7 post from Silicon Alley Insider
See May 7 post from All Things Digital
See May 7 post from Tech Confidential