This isn't completely over yet.
Microsoft is now being reported to be talking with Yahoo again but this time it is for some type of partnership or joint venture for search-related advertising to take on Google.
However, Yahoo has been in talks with Google for a while about some type of an arrangement with them.
Billionaire investor Carl Icahn has launched a proxy campaign to replace Yahoo's board. He owns 3.4 percent of Yahoo stock and has some support from a few other large Yahoo investors.
A lot is going on with this. Here are some articles with more details:
http://blogs.reuters.com/mediafile/2...ck-with-icahn/
Microsoft, Yahoo! Resume Talks - Forbes.com
PC World - Business Center: Analysts: Microsoft Likely Eyeing Yahoo Search Assets