With the Microsoft-Yahoo-Google (NSDQ: GOOG) dance so fluid, analyst reports are going stale pretty fast. Whereas just a couple days ago, most analysts were debating "what price" a deal would occur at, now they're back to debating "if".

Jeff Lindsay, Bernstein: "Yahoo!'s (NSDQ: YHOO) proposed trial of search with Google is a shrewd move that could significantly complicate Microsoft's (NSDQ: MSFT) unsolicited bid for Yahoo!" Lindsay argues that if the trial is successful, the path is paved for Yahoo to justify a $40 per share valuation. He also makes an important note about why Google is now willing to make this move, when previously it expressed concern over anti-trust issues. The difference is that at that time, Google's DoubleClick acquisition hadn't yet closed, and the company didn't want to do anything to stoke the fears of regulators. Now that that's out of the way, it can show a little more verve. Ultimately, the deal makes sense for Microsoft up to $35 per Yahoo share, but if the company is forced to go beyond that, then an offer makes less sense.

Ben Schachter, UBS: The Google deal doesn't represent an alternative path, in Schachter's view, but instead is a "pure negotiating tactic." He also doesn't expect any long-term agreement between Yahoo and Google to pass regulatory muster. However, Yahoo could still use the results of the test to argue that a combined Microsoft-Yahoo would offer more value, meaning Microsoft should raise its bid. "We continue to believe reaching a mutual agreement with Microsoft would be the best way for Yahoo! to potentially extract a higher bid; the alternative would be for Yahoo! shareholders to tender, although this process would not be as expeditious as if the two sides were to come to terms, and could involve a lower offer price, making the battle potentially even more protracted."

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