According to a Yahoo news report (and they would hopefully know...), Yahoo is in talks with NewsCorp in attempts to stave off Microsoft's Hostile Bid.
Yahoo rebuffed Microsoft's advances on Monday, but given how the "No thanks" was worded it seemed as if Yahoo wasn't saying no, period, Just No at this price.
Microsoft seemed to initially have the field to itself with this high of an offer, but Yahoo being smart is trying to find the best deal possible. NewsCorp has been emphasizing its web portion of the business more and more culminating in a buyout of mySpace last year.
This is either a strong attempt out of Yahoo to raise the bid to the mid-40s or above, or they are so desperate not to be assimilated that they are running to whoever will off shelter.
Microsoft will see what comes out of this, but they don't have all the time in the world. To launch a proxy fight and dump Yahoo's board they would need to be prepared to fight by mid March.
It is gonna get interesting!