In trading in Frankfurt, Yahoo's shares were trading sharply lower while Microsoft's were modestly higher. In addition, some notable analysts were suggesting that the Microsoft bid for Yahoo could be revived at some point. Bloomberg.com reported:

UBS AG's Heather Bellini, the top-ranked software analyst by Institutional Investor magazine, has said that Microsoft could come back and buy Yahoo later on if it walked away this time. Microsoft may approach Yahoo again in three to six months, said Robert Breza, an RBC Capital Markets analyst in Minneapolis.

Oracle Corp., the third-biggest software maker, initially abandoned its bid for BEA Systems Inc. after BEA asked for 24 percent more than Oracle's $17-a-share bid. The two companies agreed to the buyout three months later at $19.38 a share.

Bloomberg.com also reported that Laura Martin, an analyst at Soleil Securities Corp estimated that Yahoo's stock would drop $8 per share in today's trading. Friday's close was $28.67. In my opinion, given market expectations that an embattled Yahoo CEO Jerry Yang will be under considerable shareholder pressure, which could push him to accept a deal on less attractive terms than Microsoft's offer and/or take steps to protect shareholder value via stock buybacks/structural changes in Yahoo's business e.g., the sale of part of its business, I don't believe things will be quite that bad for Yahoo. Intra-day trading might take Yahoo down to near or just below $20 per share, but prices will probably firm up before the close.