In Microsoft latest statement they have told that they are not still stopping the possibility of Yahoo Microsoft merge. See their statement here.
Microsoft announced that it is continuing to explore and pursue its alternatives to improve and expand its online services and advertising business.
REDMOND, Wash. — May 18, 2008 — Microsoft Corp. today issued the following statement:
“In light of developments since the withdrawal of the Microsoft proposal to acquire Yahoo! Inc., Microsoft announced that it is continuing to explore and pursue its alternatives to improve and expand its online services and advertising business. Microsoft is considering and has raised with Yahoo! an alternative that would involve a transaction with Yahoo! but not an acquisition of all of Yahoo! Microsoft is not proposing to make a new bid to acquire all of Yahoo! at this time, but reserves the right to reconsider that alternative depending on future developments and discussions that may take place with Yahoo! or discussions with shareholders of Yahoo! or Microsoft or with other third parties.
“There of course can be no assurance that any transaction will result from these discussions.”
So it is still possible to have a merge and all this hear say about Yahoo and Microsoft going separate ways is still not true. So let us see for the latest information that might happen for possible Yahoo and Microsoft partnership.