There was enough Yahoo news this week to devote this week’s The Web Week in Review to the besieged internet company.

Microsoft again says it’s interested in bidding for Yahoo

Carl Icahn and Steve Ballmer make for an unusual team but according to reports, they’ve decided to play ball.

A flip-flopping Microsoft issued a statement on Monday indicating that it would be interested in pursuing an acquisition of all or part of Yahoo again provided that the current Yahoo board of directors is replaced.

By publicly supporting Icahn’s move to oust Yahoo’s board, Microsoft signals that it isn’t done with Yahoo just yet.

According to a statement issued by Icahn:

Steve made it abundantly clear that, due to his experiences with Yahoo during the past several months, he cannot negotiate any transaction with the current board.

In a later statement, he indicated that Ballmer had personally informed him that a new board would bring Microsoft back to the table.

Yahoo, which saw it stock plummet after Microsoft formally withdrew its bid, issued a release stating that it isready to enter into negotiations.

But if Microsoft stands firm and is serious about only dealing with a new board, there appears to be little way for Yahoo to avoid a proxy battle.

And that could get interesting because it’s not entirely clear what Icahn really wants.

According to one analyst, Microsoft might be able to get Yahoo for less than $30 per share if Icahn wins a proxy battle. While some investors may be inclined to “take what they can get,” others seem to be predicating their support on Icahn’s promise to set a minimum price.

Legg Mason Capital Management is Yahoo’s third largest institutional shareholder and portfolio manager Bill Miller toldReuters:

“The difficulty with Icahn is he’d have more shareholder support if he would say he wouldn’t sell the company for less than $33.”

Clearly, Icahn has a tight rope to walk and will need to successfully placate a number of parties with different interests if he is to win a proxy battle.

According to All Things Digital’s Kara Swisher, however, he already has one of Yahoo’s largest institutional shareholders, Capital Research Global Investors, leaning towards voting against the current Yahoo board.

If that happens, placing a bet on Icahn in this fight might not be such a bad move.

Yahoo! chief Jerry Yang hits back at Carl Icahn and Microsoft

While Yahoo says it’s ready to reengage with Microsoft over a possible acquisition, beleaguered Yahoo CEO Jerry Yang thinks it’s all just a conspiracy.

He stated:

“I think that the destabilising by Microsoft has become more and more intentional. I am not happy about it.”

Advising that abacking Icahn in a proxy battle would be “a really bad choice,” he expressed bewilderment that Microsoft won’t talk to him again.

To be sure, Yang is fast becoming a puzzle wrapped in an enigma. While he apparently is willing to revisit an acquisition with Microsoft, he thinks the Redmond giant is intentionally trying to destroy his former Silicon Valley giant.

Frankly, I think it’s unlikely this schizophrenic approach isn’t likely to set the table for productive negotiations.

At the end of the day, Yang just wants to “bring stability back to Yahoo!” and “get on with building the company.

I bet he does. Unfortunately, it appears that Yang’s nightmare is only just beginning.

Sun Valley Diary: The Yahoo-Google Power Table

Talk about a foursome. What happens when Google’s Larry Page, Yahoo’s Sue Decker, Bill Miller of Legg Mason and former Yahoo CEO Terry Semel all meet up in a bar?

Nobody quite knows. The group met up at the bar at The Lodge in Sun Valley during the ongoing Allen & Co. mogul meetup and the New York Times reports that that Page and Miller did most of the talking.

It’s unlikely they were just being drama queens and trying to spark some gossip. One of my sources, who knows none of these individuals and who wasn’t in Sun Valley, speculates that the group was talking about how Coldplay’s new hit song “Vida la Vida” applies metaphorically to Yahoo.

Unfortunately, from all appearances, it appears that when Jerry Yang arrived in Sun Valley, his conversations with new buddies Larry Page and Sergey Brin weren’t so pleasant. A photo really is worth a 1,000 words.

Yang: “Man this stuff is killing me. When I started Yahoo I never thought I’d have to deal with shareholders and people like Carl Icahn. What should I do guys?

Page: “Don’t worry, bro. You just handed over search advertising to us and you know we’re going to deliver. And remember, if Icahn wins the proxy battle and you need a job, there’s an office waiting for you at the Googleplex. I’ll even make sure you’re close to Marissa.

Brin: “Yeah you’re a Stanford guy just like us and we would never let a fellow Stanford billionaire slip through the cracks. By the way, if you need a ride home we have an extra seat available on the Google party jet. Mark Zuckerberg said he’s taking a road trip home with Marc Andreessen and won’t need a flight.

Yahoo seeks ad revenue by fueling others’ search innovation

After capitulating to Google, Yahoo has unveiled its latest attempt to compete in search – it’s opening up its search engine to developers.

On Wednesday, the company announced BOSS – Build Your Own Search Service. As describes:

With it, someone can build an independent Web site with a search box, pass users’ queries to BOSS, process the results returned by Yahoo’s search engines in any manner, and display the results.

BOSS is open and free but Yahoo does reserve the right to display advertising on any BOSS services run by “partners that succeed.

Yahoo sees BOSS as a way to “expand the footprint of Yahoo search advertising on the Web” and will reportedly control all of the advertising it displays on BOSS-built services (it doesn’t plan to employ the advertising assistance of new partner Google).

While there is no doubt that BOSS seems appealing and probably offers little downside for Yahoo, it’s questionable as to whether BOSS will really pay dividends.

As Larry Dignan at ZDNet points out, BOSS is more a “Hail Mary” pass than a part of Yahoo’s “DNA.

My skepticism about BOSS is based primarily on Yahoo’s rosy projections. posted a graphic from Yahoo showing its current search marketshare alongside a projection of its search marketshare once BOSS gets established.

My opinion of the projection? Laughably insane. But with Jerry Yang at the helm, laughably insane seems to be business as usual for Yahoo.

Yahoo director decries ‘Imperial CEOs’ (and no, Yang’s not one of them)

Add one to the hypocrisy file.

Yahoo director Gary Wilson’s editorial in the Wall Street Journal calls “America’s most serious corporate governance problem” the “Imperial CEO.”

What is an Imperial CEO?

“A leader who is both chairman of the company’s board of directors as well as its chief executive officer.”

There’s only one problem, as the Mercury News’ Jack Davis points out. Wilson is the director of railroad behemoth CSX, whose CEO is also the company’s chairman.

To add insult to injury, Wilson also cites Yahoo as a case study for the separation of CEO and chairman powers, claiming that:

“…the separation of the chairman and CEO roles in 2007 has made the present situation involving Microsoft and other alternatives a shareholder-focused process marked by close board oversight of management.”

If Yahoo’s bungling of the Microsoft acquisition bid has been a “shareholder-focused process,” one might want to ask Wilson why so many shareholders are mad and why Wilson may soon find himself and the other members of the Yahoo board with one less corporate subsidy.