What seemed to be a done deal, with grief over Yahoo!'s passing as a free and independent company, now has turned into a circus. The offer of $31 per share in combined cash and own shares that Microsoft laid on the table is now almost worthless, because Yahoo!'s stock has risen so much that owners would be better off selling it on the market.

Up to a phenomenal $29 a share, Yahoo! has been enjoying the rumors surrounding the bid that the Redmond-based company forwarded exactly one week ago. I'm guessing Microsoft did not see this one coming when they offered the 62 percent premium, or else they would have made it bigger and juicier. In the meanwhile, to go with the package, Microsoft's own shares have dropped and automatically decreased the value of the bid, or so to say.

Yahoo! has been shopping itself around for the past week, but the answer laid right in its own backyard. Will this give them the strength they need to just say no to the 'generous' offer (some analysts considered that YHOO shares were actually worth somewhere between $35-$41) ? That remains to be seen, but the complications the stock market just provided Microsoft with must have had a few important people in the Redmond offices slapping their foreheads.

The second part to the story is that if it manages to decline the invitation to join MSFT, Yahoo! can also try and work up a momentum to deal with Google in a totally different manner. Giving up its advertising and search businesses wouldn't have sat well with the regulators, so that wasn't a first choice, but now if the Microsoft threat is averted, some relatively solid ground will be under Yahoo!'s feet for a period of time, which they can use to cut a way better deal with Google. Because they will pay, if they truly want something, and at the moment there's nothing they'd like more than dominance in the search and advertising.