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A few months from now, Yahoo's search engine will be "powered by Bing." After months of back and forth between Microsoft and Yahoo, the two companies finally announced a deal today that will bring Microsoft's search engine to Yahoo's properties, while Yahoo will become the sales force for both companies' premium search advertisers. Barring any roadblocks from industry and government regulators, this deal will grant Microsoft an exclusive license to Yahoo's core search technologies for 10 years. Yahoo expects that this deal will increase the company's cash flow by about $275 million.

Today, a number of rumors about a potential partnership between Yahoo and Microsoft surfaced once again. Almost a year ago, after months of back and forth between Microsoft and Yahoo, we thought any deal between the two companies was finally off the table, but rumors about potential deals continued to bubble up regularly in the last few months. Now, some news outlets are reporting that the two companies may be close to signing a partnership agreement that would allow them to collaborate on search technology and advertising. Bloomberg's Dina Bass, citing anonymous sources, reports that a deal could be finalized within the next two weeks.

Yesterday, Microsoft issued a statement to publicly acknowledge that they hadn't lost interest in Yahoo!. Instead of a hostile takeover, Microsoft may be going after Yahoo from an entirely different angle and the industry is buzzing with exactly what angle Microsoft intends to pursue. Here's a look at the statements by Microsoft and Yahoo, and what industry leaders have to say.

This weekend Microsoft withdrew its bid to buy Yahoo! and there's plenty to be read about the business angles in the collapse of the deal. Here at RWW we're focused more than anything on innovation in online technology and by some accounts an independent Yahoo! is good news in that regard.

It's often said that Flickr is the new heart of Yahoo! and many early adopters (like our readers) are probably more likely to use Yahoo! services like Del.icio.us, Upcoming or even the new FireEagle than they are to be big Yahoo! Sports or Finance fans. Instead of putting the most innovative Yahoo! properties in Microsoft's hands, we'd like to see them put at the heart of the company's strategy for the future.

Like most people, when I saw the headline “Google founder spooked by Microsoft bid” (because Microhoo dominance would stifle innovation on the Internet) my thoughts ran to pots and kettles, PR battle for proxy votes, confuse the enemy with antitrust and so forth.

Don’t the Google guys realise how big and dominant they have become? Sure they do, but “only the paranoid survive” and Microhoo does give some room for paranoia in the Googleplex.