Microsoft (MSFT) makes another offer for Yahoo! (with Icahn)

Late Friday, Microsoft (NASDAQ: MSFT) and Carl Icahn made an offer to the Yahoo! (NASDAQ: YHOO) board. Microsoft would buy Yahoo!'s search business and Icahn would take the rest of the company. Yahoo! was given one day to respond.

The Yahoo! board rejected the offer.

According to Reuters, "This odd and opportunistic alliance of Microsoft and Carl Icahn has anything but the interests of Yahoo!'s stockholders in mind," Yahoo! Chairman Roy Bostock said in the statement.

Smart move. The offer from Microsoft and Icahn looks desperate. Many investors have indicated that they do not want to side with Icahn in his proxy fight against Yahoo!, unless he can guarantee a price at which the company will be bought. These shareholders probably think Icahn cannot operate Yahoo! as an independent company much better than the current management can.

Microsoft needs Yahoo!. Redmond is now a distant third in the search business. If Yahoo! wins the proxy battle, Microsoft will be back with an open wallet.

Douglas A. McIntyre is an editor at 247 wallst.com.