I had posted on the madness of Jerry Yang a couple of weeks back. And today, Reuters reports that:

Microsoft Inc is in talks with Yahoo Inc to buy the U.S. internet company’s online search business for $20 billion, according to a report in Britain’s Sunday Times.

The proposal under discussion involves a complex transaction that would see the U.S. software giant support a new management team to take control of Yahoo, but it has no intention of refreshing its bid, said the newspaper.

Microsoft withdrew its $47.5 billion buyout offer for Yahoo in May after Yahoo chief executive Jerry Yang and his board rejected the bid as too low.

Tough to go up against the Borg, Jerry. And saving them $25 billion or so in the process just does not make sense for the shareholder. Except perhaps for Carl Icahn. He seemed to know that something was up.