Microsoft, Yahoo Deal Talks -- On Again?

With Microsoft and Yahoo each scheduled to issue financial reports this week, and Yahoo board member Carl Icahn agitating for the companies to strike a deal, investors and customers of each company are looking forward to the week with high hopes.

While Icahn wants a search deal -- he once lobbied for Yahoo to sell its search business to Microsoft for $1 billion -- unconfirmed reports have the two companies teaming up on advertising with Microsoft contributing billions of dollars worth of search operations and Yahoo contributing its expertise in online advertising.

"I've been a strong advocate of getting a search deal done with Microsoft," Icahn told the Reuters news agency. "It would enhance value if a deal got done, because of the synergies involved."

The firms have been talking -- and talking -- for months with Microsoft expected to do more on the acquiring side of the equation. Yahoo's chief executive Carol Bartz has said any search deal involving its search operation would require a partner with "boatloads of money."

Yahoo is scheduled to announce its financial report Tuesday and Microsoft is scheduled to announce its numbers on Thursday.

One reason for optimism that a deal may be reached is that Bartz is considered to be more accommodating than Yahoo's previous leaders, Jerry Yang and Terry Semel, each of whom fended off Microsoft's overtures.

Another compelling reason for an agreement between Microsoft and Yahoo is their common archrival -- Google, which continues its strong market share hold on search. According to market researcher comScore Inc., Google leads with 65% of the search market share, followed by 20% for Yahoo and 8% for Microsoft.

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