Microsoft also made a compelling and brutally honest argument for fusing its Internet unit with Yahoo: It was the way to mount at least a credible challenge to Google, absolute ruler of search, the largest, most profitable and most important online ad market segment.
Thus began the tragicomic cat-and-mouse game between Microsoft and Yahoo that, surreally, lasts to this day.
We saw Yahoo's repeated rejections of Microsoft's attempts to acquire the company and, later, of buying only its search business.
Meanwhile, Yang made overtures towards seemingly anyone -- Google, News Corp, Disney, AOL -- who might be interested in a deal that would allow him to save face before his shareholders.
Investors became incensed at what they perceived as Yang's attempts to derail the Microsoft negotiations out of pride or self-interest but, in their view, never to protect their money. Leading the charge was Carl Icahn, who railed at Yang and his fellow board members and mounted a proxy battle before being appeased with a board seat for himself and two of his backers.
Finally, a deal was struck with Google, calling for Yahoo to run search ads from its competitor, which would give Yahoo a much-needed cash influx. But the deal was never implemented. It imploded when the U.S. government made clear it would challenge it on antitrust grounds and Google opted to walk away.
Talks about a merger with AOL have been popping up regularly since February, but evidently the companies haven't been able to agree to one.