Analysts to Microsoft: 'Yahoo? Time to Move On' - Page 2

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"You've got mail?"

So, given that penchant, what can Microsoft do to increase its chances with search and search advertising? It could, for example, buy up smaller search providers – such as AOL – suggested more than one observer.

"I think you're going to see them be pretty aggressive in shoring up their own search and display business [because] I would assume they're not out of the buying market yet," Gartner analyst Andrew Frank told InternetNews.com.

Frank was suggesting that Microsoft would now be freed up to go after some of the large, independent ad networks still around, like ValueClick. "I don't think you're going to see a slowdown in M&A activity in this area."

Enderle thinks that's not the best avenue for Microsoft, however.

"It doesn't make sense to buy someone who's smaller [and] if they buy up properties, they're much better off trying to buy on the front of the trend curve," Enderle said. For that, he suggested Microsoft should be looking at areas such as portals and social network technologies.

In fact, the company made a $240 million investment in Facebook last fall. Further investments in Facebook have also been rumored as well but haven't panned out so far.

However, for anyone looking for a silver lining to the way things turned out, there is at least one upside for Microsoft.

"For the foreseeable future, Microsoft's Office and Windows revenues are going to keep bringing in money," King said. "It's got a lot of cash and a lot of very smart people there."

All that said, however, never say never, says Interarbor Solutions' Gardner.

Billionaire corporate raider Carl Icahn still has a proxy fight going with Yahoo's board, and Yahoo is already up to its hip waders in shareholder lawsuits over the failed Microsoft bid. Despite its deal with Google, Yahoo may still find itself having to sell off all or part of itself before all the wrangling is finished. So some sort of deal with Microsoft might still be in the cards.

"I still have to wonder whether the fat lady has really sung yet," Gardner added.

Kenneth Corbin contributed to this report.