Tech’s Pam & Tommy Lee

Yahoo shares spiked on Wednesday after The Wall Street Journal reported Microsoft might team up with another media company in its quest to buy Yahoo's search business.

The paper reported Microsoft has spoken to News Corp.,Time Warner and others about a way to complete the proposed deal, which the software maker has been exploring since withdrawing a $47.5 billion bid to buy Yahoo in its entirety in May.

Microsoft had previously proposed buying Yahoo's search operations for $1 billion and investing an additional $8 billion for a 16 percent stake in Yahoo's remaining business.

Sunnyvale, Calif.-based Yahoo rejected that offer and instead forged an advertising partnership with Google , whose rapid growth prompted Microsoft's bid for Yahoo in the first place.

The Journal suggested that Microsoft would still buy Yahoo's Internet search business, and the rest of the company would be combined with another outlet, like News Corp.'s MySpace or Time Warner's AOL.

“Sounds good,” writes CNBC’s Jim Goldman in his blog. “Yahoo, or at least a chunk of it, is back in play. But the next paragraph, not buried deep in the story, but the VERY next sentence, says, "Microsoft has held discussions with Time Warner Inc. and News Corp., among others, say some people involved in the discussions. These people say the talks are unlikely to result in a deal."

Nobody that Goldman has spoken with will confirm that there’s any kind of deal of any sort.

And I’m not seeing any options action in any of these names to suggest a deal anytime soon, adds Jon Najarian on CNBC’s “Closing Bell.”

“I think people are missing the punchline here, says Piper Jaffrey analyst Gene Munster on Fast Money. “Microsoft wants Yahoo and at the end of the day I think that’s going to happen. We believe by the end of this year you’ll see Microsoft and Yahoo come together…. at around $28 - $31/share.”

And not just for search. “They have to buy the whole thing,” adds Munster. This is a true platform. Yahoo! is number one in display and number two in search. We think all this talk about breaking up Yahoo is absurd.”

In case you couldn’t guess Munster recommends Yahoo! stock as a buy. “Ignore the noise and own Yahoo!” he concludes.

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Trader disclosure: On July 2, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (ITNC), (MSFT), (NUE); Finerman Owns (GS); Finerman's Firm Owns (SUN), (TSO), (VLO), (MSFT), (PM); Finerman's Firm Owns SPX Index Puts; Finerman's Firm And Finerman Own (C) And (C) Leaps; Finerman's Firm Owns (GE) And (GE) Puts; Finerman's Firm Is Short (XME) And Owns (XME) Puts; Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM); Najarian Owns (AAPL), (CHK), (HPQ), (TSO), (XLF); Najarian Owns (MER) Puts; Najarian Owns (SLB) Calls, (WM) Calls, (YHOO) Calls, (ZRAN) Calls ;Seymour Owns (AAPL), (F), (MER), (MSFT), (TSO); Seygem Asset Management Owns (EEM), (TTM)

Piper Jaffray Received Non-Investment Banking Securities-Related Compensation From (MCHX) In Past 12 Months; Piper Jaffray Received Non-Investment Banking Securities-Related Compensation From (SOHU) In Past 12 Months; Piper Jaffray Is A Market Maker In (AAPL), (ADBE), (ADSK), (BIDU), (CHKP), (CNET), (GOOG), (MCHX), (MFE), (MOVE), (SINA), (SOHU), (SYMC), (VRSN), (YHOO)