Citing anonymous sources within both companies, technology blog TechCrunch reported on Tuesday that Microsoft and Yahoo are holding official negotiations after talks broke down on May 3.
This time around, Microsoft's offer is below US$33 per share, according to TechCrunch. That was Microsoft's last offer to Yahoo, which in turn wanted $37 per share.
Yahoo's stock opened on Tuesday at $21.18 and dropped to $20.60, but the report gave it a boost and it rose to $23.71.
However, the price started to fall after that initial surge and by 2:25 p.m. U.S. Eastern Time, the stock was up 3 percent at $22.10 on heavier-than-normal trading volume of 68.1 million shares, compared with the daily average of 39.3 million.
Neither Microsoft nor Yahoo responded to requests for comment.
Microsoft announced its unsolicited offer to buy Yahoo on Feb. 1 -- a $44.6 billion cash-and-stock deal that offered shareholders a 62 percent premium over Yahoo's stock price the day before of $19.18.
Ten days later, Yahoo's board rejected that offer, saying it undervalued the company. That day, Feb. 11, Yahoo's stock closed at almost $30.
Microsoft later increased its offer to $33 per share, or about $47.5 billion, but Microsoft eventually walked away from the negotiations on May 3 after the two sides failed to agree on a price.
After Microsoft withdrew its offer, several large Yahoo institutional investors publicly criticized Yahoo CEO Jerry Yang and the board for not negotiating in good faith and failing to look out for shareholders' best interests.
Since then, Microsoft officials have repeatedly said the company isn't interested in acquiring all of Yahoo. Microsoft did offer to buy Yahoo's search advertising business later, but those negotiations also fell through. Yahoo instead struck a more limited deal to outsource part of its search ad business to Google.
In the meantime, billionaire investor Carl Icahn loudly expressed his displeasure with Yang and the board, and announced his intention to launch a proxy fight to oust Yahoo's board with his own slate of candidates and name a new CEO, in the hopes of luring Microsoft back to the negotiating table.
Lately, however, Icahn has given some indications that he may be softening his stance, and there has been speculation that he may seek to win some board seats instead of going for a full takeover.
Yahoo also faces lawsuits from shareholders who allege that the company's management and directors sabotaged Microsoft's acquisition attempt in order to protect their own financial interests, thus breaching their fiduciary duty to shareholders.
Yahoo has also recently faced a steady stream of high-profile departures from its executive ranks, including Flickr founders Caterina Fake and Stewart Butterfield; executive vice president of the search and advertising technology group Qi Lu; senior vice president for Yahoo's search group Vish Makhijani; and Jeff Weiner, executive vice president of Yahoo's Network Division.
In addition, Chief Data Officer and Executive Vice President of Research & Strategic Data Solutions Usama Fayyad will end his Yahoo tenure in September, while there have been reports that Brad Garlinghouse, senior vice president for communications and communities, will also leave.