In the latest news, Microsoft and Yahoo talks are back on. But not for an acquisition this time. Microsoft officially states:

Microsoft is considering and has raised with Yahoo! an alternative that would involve a transaction with Yahoo! but not an acquisition of all of Yahoo!

This leaves us with a couple of options:

• An outsourcing deal with Microsoft competitive to what has been discussed with Google. Microsoft couldn’t win this type of deal based on the merit of their real monetization so my guess is that they would be buying this inventory even if they lose money just stop the potential deal with Google. And it would only be on so called “Back-fill” where Yahoo has no coverage
• They are discussing alternative arrangements, such as a spinning off of search technologies, or other strategic deals whereby they share intellectual assets and inventory.

Whatever it is, expect to hear something soon. Whatever is going to happen is going to have to happen within the next few weeks.