The Microsoft / Yahoo! saga continues with a new approach by Microsoft to buy Yahoo!'s search business. As reported by The New York Times, the new offer marks a formal alliance between Microsoft and Carl Icahn, the billionaire investor who has been trying to oust Yahoo!'s board and creating an increasingly hostile and aggressive approach to achieve his - and Microsoft's - desired outcome.

Yahoo! quickly rejected the new offer and the board, who are defending their own positions, appealed to shareholders to reject the approach as a bad move for Yahoo! This latest move is likely to reach a showdown at the annual shareholder meeting at the start of August. Yahoo’s board apparently indicated to Microsoft on Saturday that it was willing to sell the whole company at $33 a share, which was the price first offered by Microsoft back in May, which Yahoo had rejected.

More details about the latest negotiations are included in the article and this story is bound to generate much more coverage and comment until such point as a definite outcome is achieved.