Details on deal still in the dark

Microsoft and Yahoo are keeping hope alive.

Less than two weeks after Yahoo said its negotiations with the tech giant had concluded — and it inked a deal with rival Google — the two are still apparently talking about a potential deal, although there are conflicting reports about what kind of agreement they are discussing, with a search deal considered more likely than an outright purchase.

Word of their talks goosed Yahoo’s stock up 59¢, or 2.8%, to finish Tuesday at $22.04; it was the stock’s largest one-day gain in two weeks. Yahoo’s market value has dropped 16% since it announced the Google deal and the end of the Microsoft talks June 12.

The company also has been hit by a series of exec defections in recent weeks. A reorg is expected soon.

The stock slide is making it even harder for Yahoo’s board to justify its decision to turn down Microsoft’s last takeover offer of $33 per share. Yahoo CEO Jerry Yang had sought $37 per share.

Yang is now under intense pressure to prove Yahoo is worth as much as he thinks while also trying to fend off a shareholder revolt being led by activist investor Carl Icahn.

The backlash may have prodded Yahoo to rekindle talks to sell its search operations to Microsoft as part of a $9 billion deal. The companies are said to be exploring a deal at a higher price than was previously discussed.

One prominent tech blog, TechCrunch, said the companies were discussing a complete takeover, but others have refuted that. Yahoo is not commenting.

If nothing else, Wall Street’s enthusiastic reaction to Tuesday’s reports served as yet another reminder that Yahoo shareholders like the idea of the company teaming with Microsoft instead of Google.

Yang and the rest of its board are facing a challenge at the company’s Aug. 1 annual meeting. Icahn has nominated an alternate slate of directors and promised to fire Yang as CEO if he wins control of the board.

The Google partnership is supposed to boost Yahoo’s annual revenue by about $800 million, but some believe it could hurt Yahoo in the long run. Microsoft aborted its takeover bid due to concerns about Yahoo’s willingness to partner with rival Google.

The Google-Yahoo partnership is expected to come under antitrust scrutiny — together, they control more than 80% of the U.S. search advertising market.

If Yahoo strikes an alternative deal with Microsoft, Google will be owed a termination fee of up to $250 million.

(The Associated Press contributed to this report.)

Follow @Variety on Twitter for breaking news, reviews and more