Microsoft is talking to Yahoo! about an alternative transaction that doesn't involve an acquisition, the world's largest software maker said Sunday.

Just a few hours after Yahoo! rejected Microsoft's $44.6bn purchase offer, the Redmond-based software giant has responded, reiterating that it "reserves the right to pursue all necessary steps to ensure that Yahoo!'s shareholders are provided with the opportunity to realize the value inherent in our proposal."

Google Inc. raised the specter of Microsoft Corp. using its proposed $42 billion acquisition of Yahoo Inc. to gain illegal control over the Internet, underscoring the online search leader's queasiness about its two biggest rivals teaming up.

Microsoft has committed to becoming a mixed ASP.NET and PHP shop for the "foreseeable" future should its proposed Yahoo! acquisition succeed, rather than convert popular services like Yahoo! mail to Microsoft's .NET architecture.

Yahoo Inc.'s board plans to reject Microsoft Corp.'s unsolicited $44.6 billion offer to acquire the Web giant, a person familiar with the situation says.

Novell's and Microsoft's savings from "past glory" days enable them to pretend

In one of the most significant moves yet in the growing push toward service interoperability on the Web, tech giant Yahoo announced Thursday that it is supporting the OpenID 2.0 standard for a universal Internet log-in.

Microsoft’s proposed $45 billion buy of Yahoo would give the Redmond, Wash company control over a top open source e-mail company, open source projects and an open source infrastructure. On September 17 of 2007, Yahoo bought Zimbra for $350 million. Yahoo’s infrastructure is built on BSD. Yahoo has released a myriad of software to the open source community and even sponsors some open source projects. So this deal would put Microsoft directly into the open source software business.

Option investors bet heavily on Monday that Yahoo might strike a deal of some sort with Microsoft Corp, spurred on in part by pressure from activist shareholder Carl Icahn.

Microsoft has proposed an alternative deal for Yahoo, a complex transaction that would include just buying Yahoo's search business, rather than a full buyout, a person familiar with the discussions said on Monday.