Microsoft, Yahoo annouced that they are going steady, but not yet ready to take the plunge

From Reuters:

"A potential partnership deal between Microsoft Corp and Yahoo Inc the companies revealed over the weekend may prove to be a stepping stone to an outright acquisition, analysts said on Monday.

UBS analysts said in a research note that the business discussions between Microsoft and Yahoo could be a prelude to an eventual outright acquisition offer because it was vital for Microsoft to acquire Yahoo on friendly terms.

'A near-term deal could act as an intermediate step that would go a long way toward testing the waters,' UBS wrote."