If Yahoo said no to Microsoft, what could it do?

By Anupreeta Das

SAN FRANCISCO (Reuters) - For Yahoo Inc (YHOO.O: Quote, Profile, Research) to avoid Microsoft Corp's (MSFT.O: Quote, Profile, Research) bear hug, it could potentially partner with companies ranging from eBay Inc(EBAY.O: Quote, Profile, Research) to Comcast Corp (CMCSA.O: Quote, Profile, Research), though an alternative deal would be unlikely to match the Microsoft offer.

Retailer Amazon.com Inc (AMZN.O: Quote, Profile, Research) , iPod maker Apple Inc(AAPL.O: Quote, Profile, Research) and phone company AT&T Inc (T.N: Quote, Profile, Research) all could argue that integrating Yahoo's services and ads would be strategically smart, and some already have Internet-advertising partnerships with Yahoo.

None, however, is expected to be able to compete financially with Microsoft, whose offer is now worth about $41 billion, making the alternative deals longshots at best.

Web auction leader eBay struck a multiyear partnership in 2006 with Yahoo, centered on search and advertising, online payments and call functions.

A merger could further benefit eBay if it integrated its Web auctions with Yahoo's search technology, said Brian Bolan, an analyst with Jackson Securities. It could also yield cost savings for eBay on Internet search advertising and merge users of Yahoo's email and instant messaging services with eBay's Skype users, he said.

"But such a deal wouldn't solve the question of how you could make online search better, and that's why you would want to buy Yahoo," Bolan said.

Also, eBay -- which recently announced a new chief executive -- is itself facing challenges in reinvigorating its auction site and would have to raise debt to buy Yahoo at a higher price, making it an unlikely acquirer, analysts said.

One analyst suggested that Yahoo might find a "natural home" in Apple since it was unlikely Yahoo could stand alone.