Microsoft, which spent $6 billion on aQuantive and was chasing Yahoo for its ads before it came to a dead stop, has been supporting - as in helping write - legislation in New York and Connecticut that would regulate the data that companies like Yahoo and Google collect for targeted advertising. The New York bill, which Google, Yahoo, AOL and Facebook oppose, would let consumers opt-out of tracking.

So how does it feel to have witnessed one of technology's little miracles this week? I mean Yahoo's stock price successfully defying gravity. It's as close as any of us will ever get to an apparition of the Virgin Mary floating on a cloud without any visible means of support. Apparently Wall Street isn't convinced that Microsoft has indeed pushed on despite leaks that it has reached out instead to Facebook, another company with an inflated view of itself.

Yahoo's stock dropped roughly 19%-20% this morning at the open, shaving $8.7 billion off its value, its first installment on the price of its independence from Microsoft. Yahoo, whose position improved a couple of percentage points in the first half-hour of trading, is being held up by investor confidence that Microsoft will be back after the stock sinks, a widely held view, or alternatively that Yahoo will align with Google. At around 10 o'clock it was around $23.70.

Yahoo! founders Jerry Yang and David Filo received stupid advice from their investment bank advisers and blew their chance to close the deal with Microsoft as of this Sunday morning. Neither Yang nor Filo are experts on how to sell a company in a multi-billion dollar deal. They have relied on their investment bankers and advisers since the negotiations started with Microsoft. The difference between the offered price of $33 and the asking price of $40 per share is roughly $1.4b per share, so it's not small potatoes.

Monday morning before the markets open Bloomberg reported 'Yahoo, that spent three months fighting a takeover by Microsoft, tumbled $6.37 to $22.30. The software maker said this weekend it walked away when Yahoo demanded $37 a share. Microsoft had increased its $44.6 billion bid by about $5 billion to $33 a share. Microsoft shares added $1.27 to $30.51. '

Despite meeting yesterday, the Microsoft Board of Directors - according to the Wall St. Journal - has not decided whether its $31 a share offer for Yahoo!, which has fallen in value to $29 a share in line with a fall in Microsoft's own stock value, should be hoisted to $33 a share in an attempt to keep alive Redmond's two-year pursuit of the Silicon Valley based search giant.

Time is running out on Microsoft's deal-or-else ultimatum to Yahoo! Basically Yahoo! has to move off the dime by Saturday or else Microsoft could try taking the place by force, lowering its rejected $31-a-share bid in the process or - scarier still for Yahoo! - Microsoft could walk away completely, a move that will send Yahoo! stock back to the teens and could be the undoing of Yahoo!'s desperate CEO Jerry Yang.

Yahoo! is reportedly getting closer to that controversial deal that would outsource its search advertising to Google. Sources told the Wall Street Journal that the limited test of Google that Yahoo! set up went well. The Google strategy, which could potentially be worth a billion dollars a year to Yahoo! but is sure to catch antitrust flak, is part of a tripartite deal that would have Yahoo! merge with AOL and AOL's owner Time Warner take a 20% stake in the combined company for some cash to fend off Yahoo!'s unwanted acquisition by Microsoft.

Well, at least somebody in the Yahoo spectacle is keeping their head. Capital World Investors, Yahoo!'s biggest institutional investor, has doubled its position to 10.1% figuring there must be some money to be made out of the fact that Rupert has abandoned Jerry to team up with Steve to gang bang Jerry, who's now sleeping with his worst enemy Eric, who - if the antitrust police catch them at it - can always claim he did it to help Steve out.

The European Commission may crack down on Google, Yahoo!, Microsoft et al and tell them they can't keep personal search data longer than six months - and even that may be pushing it. The EC's international advisory body, the Article 29 Data Protection Working Party, whose findings are usually adopted, delivered its 29-page opinion to the regulator last Friday and it ain't buying Google's dearly held arguments of better search results or custom tailored ads.