Yahoo admits Microsoft deal may be "best option"

Both Microsoft big wig, Steve Ballmer, and rebel Yahoo shareholder Carl Icahn said last month that they believed a takeover by Microsoft of Yahoo would be a huge benefit to both companies.

Said Icahn: "I will say and I continue to say that sooner or later there’s got to be a deal with Microsoft and Yahoo of some type. I really believe that very strongly".

Yahoo has always refuted this and has rejected two Microsoft bids as a result - despite pressure from its shareholders.

But, with the prospect of the ad deal with Google now well and truly scuppered by antitrust authorities in the US of A, is Yahoo now reconsidering its options?

According to Reuters, none other than Jerry Yang, Yahoo's co-founder and CEO, a Microsoft deal may be the "best option" for the beleaguered web company.

Shares in Yahoo rose 5.7% upon the admittal.

So should we now be buying ringside seats for Yahoo and Microsoft, round 101?