Microsoft said on Sunday that it has raised the possibility of a new deal with Yahoo, one that may involve buying a part of the company but not all of it.
"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," Microsoft said in a brief statement.
The company did not elaborate on the proposal. It said it did not plan at this time to make a new bid to acquire all of Yahoo, but that it was continuing to explore its options to expand its online services and advertising businesses.
Microsoft withdrew its offer to buy Yahoo on May 3 after the two sides failed to agree on a price. Since then, the activist investor Carl Icahn has said he will launch a proxy battle to replace Yahoo's board and force it back to the negotiating table with Microsoft.
Yahoo spokeswoman Diana Wong declined to comment on Microsoft's statement. Microsoft could not immediately be reached for comment, although published reports said the company is not discussing its plan further in public.
"There of course can be no assurance that any transaction will result from these discussions," Microsoft said in its statement. It said it reserved the right to reconsider its decision not to buy Yahoo outright, depending on any future talks with Yahoo, third parties or the shareholders of either company.
That Microsoft is discussing a new deal could be a sign that Yahoo's leadership wants to avoid the spectacle of a proxy battle ahead of its annual meeting on July 3, the Wall Street Journal reported.
Yahoo responded to Icahn's threats on Friday, arguing that its own board gave Microsoft's offer fair consideration, and that the current board, led by Chairman Roy Bostock, can best manage Yahoo's future.
It was unclear Sunday what type of alternative deal Microsoft has in mind. It said it issued its statement "in light of developments" that have taken place since it withdrew its offer.
Microsoft indicated earlier that it had moved on from the deal and that it was looking for other ways to grow its online business, internally or through smaller acquisitions.