Microsoft Corp., the software maker that withdrew its $47.5 billion offer to buy Yahoo! Inc., proposed an alternative transaction to the Internet company and said it may still consider a full acquisition.

The new proposal wouldn’t involve buying all of Yahoo, Redmond, Wash.-based Microsoft said yesterday in a statement. Microsoft said it isn’t pursuing a bid to buy the whole of Yahoo “at this time.”

Microsoft’s announcement signals that the companies may still work together after Microsoft walked away from acquisition talks on May 3. Billionaire investor Carl Icahn pressured Yahoo last week to revive negotiations. Microsoft, the world’s largest software maker, spent three months wooing Yahoo to expand its Internet-search business and compete with Google Inc. in the $41 billion worldwide online advertising market.

“What Microsoft is most interested in is getting that Yahoo subscriber base,” an analyst at Pacific Crest Securities in Portland, Ore., Brendan Barnicle, said. Microsoft may have realized that it would face challenges in integrating the whole of Yahoo, he said.

A spokeswoman for Yahoo, Tracy Schmaler, declined to comment. Microsoft spokesman Frank Shaw wouldn’t comment beyond the statement.

Microsoft fell 46 cents to $29.99 on May 16 in Nasdaq Stock Market trading. Sunnyvale, Calif.-based Yahoo declined 9 cents to $27.66. Yahoo shares had fallen 32% in the year before Microsoft’s bid.

“Microsoft is not proposing to make a new bid to acquire all of Yahoo at this time, but reserves the right to reconsider that alternative depending on future developments,” according to the statement.

Microsoft said its decision would also depend on discussions that may take place with Yahoo, shareholders of the two companies, or other parties. Microsoft said it can’t guarantee a deal will happen.

It does signal some movement, receptivity at Microsoft to doing something,” a professor at the University of Richmond School of Law in Richmond, Va., Carl Tobias, said.

The agreement Microsoft and Yahoo are discussing involves Yahoo carrying search advertisements from Microsoft, the Wall Street Journal said yesterday, citing people familiar with the matter. That may be a way for Microsoft to scuttle talks between Yahoo and Google for a similar partnership, the newspaper said.

Yahoo said in April that it would run some Google ads next to its search results to boost revenue. Google made as much as 70% more in sales from each query at the end of last year, Yahoo has said. The chief executive officer of Google, Eric Schmidt, said on May 8 that while the test has ended, the two companies are on “very friendly” terms.

Microsoft and Yahoo discussed a partnership designed to boost each other’s share of the Web search and advertising market, people briefed on the discussions said last May.

Yahoo previously worked with Microsoft to supply ads that appear next to search results on Microsoft’s site. That accord ended as Microsoft introduced its own ad sales program, called AdCenter, in 2006. The companies have also worked together to let users of their instant-messaging networks chat with each other.

Separately, Microsoft said today that it will talk about a “major new initiative” in its search engine technology on May 21.

Microsoft will also make changes to its online branding, which is “fragmented and confusing,” the president of Microsoft’s Internet business, Kevin Johnson, said in a memo to employees. The company will also “double down” on investments in Europe, pursue small acquisitions, and expand partnerships to build up the online business, he said.

Mr. Icahn, who has threatened a proxy battle and has the backing of Yahoo shareholder Paulson & Co., said a combination of Microsoft and Yahoo would create “a force strong enough” to fight off market leader Google. Online ad sales reached $41 billion worldwide last year, according to Piper Jaffray & Co. Microsoft projected that may almost double by 2010.

Mr. Icahn disclosed that he owned 10 million Yahoo shares and options to buy 49 million more. He submitted his own slate of nominees for Yahoo’s board, including himself, the owner of the Dallas Mavericks, Mark Cuban, and the former CEO of Viacom Inc., Frank Biondi. All 10 of Yahoo’s current directors are up for re-election at the annual meeting on July 3.