Microsoft, the spurned suitor that “walked away” from negotiations to acquire Yahoo on May 3, has come courting again in a bid to thwart rival Google.

Microsoft’s latest proposal, “a transaction with Yahoo,” but not a complete acquisition, comes after billionaire investor Carl Icahn last week declared a proxy war to push Yahoo toward an acquisition deal.

UBS analyst Ben Schachter (no relation to the reporter) said the Microsoft deal “would counter” a potential Yahoo search advertising alliance with Google. Though a similar Microsoft-Yahoo partnership also could increase Yahoo’s return on search, it remains to be seen how such a deal would stack up against one with Google, the leader in search advertising, Mr. Schachter said.

“A core issue” for Microsoft is to acquire Yahoo “on friendly terms,” Mr. Schachter added, meaning a near-term deal could serve as a step toward an ultimate acquisition.

In its statement, Microsoft made clear that it “reserves the right” to reconsider an acquisition bid “depending on future developments.”

Yahoo, meanwhile, facing the challenge from Icahn, stressed that Microsoft is not pursuing the acquisition of Yahoo “at this time” and the board of directors will evaluate proposals from Microsoft and others with an eye toward shareholder value.

The latest initiatives send Yahoo shares up $.20, or .7 percent, to $27.86 in late morning trading, while Microsoft stock slid $.30, or 1 percent, to $29.69.

Acquisition negotiations broke down when Microsoft, offering $33 per share, balked at meeting the $37 per share asking price of Yahoo’s board of directors.

Amid Microsoft’s takeover bid, Yahoo has tested a system using Google’s advertising system for some Yahoo search results in a bid to bolster revenue. Such an alliance would make Yahoo a less desirable partner for Microsoft, but could trigger regulatory alarms given Google’s dominance in search advertising.

Mr. Icahn’s dissident slate of directors includes Mark Cuban, the owner of the Dallas Mavericks, who sold Broadcast.com to Yahoo for more than $5 billion in 1999.

On his blog, Mr. Cuban suggests that Microsoft or Yahoo could simply pay off Web sites to remove their names from Google’s dominant search engine index to gain market share.

Mr. Cuban suggests that $1 billion might be enough to wrest 100,000 top sites from Google.