Another day, another batch of Microsoft-Yahoo stories.

• Initially rumored to be purchasing Yahoo outright, New Corp. is now said to be seeking a partnership with Yahoo. News Corp. would get a 20% stake in Yahoo, and the latter would in exchange get the former’s Web properties, which include the lucrative MySpace, as well as some private equity. (The Register)
• Henry Blodget thinks the News Corp. proposal is bringing the advantage back to Microsoft. Why? Yahoo’s getting desperate, and its alternatives aren’t terribly attractive either. Of course, Blodget surmises, Microsoft could just say the heck with it and try to buy Faceook… (Silicon Alley Insider)
• It doesn’t help that Yahoo made good on its promise to lay off 1,000 employees — well, more like 1,100. As both Mary Jo Foley and Dare Obasanjo point out, these layoffs weren’t exactly redundancies — there were some pretty talented people in the bunch. Both wonder if this means Yahoo is trying to make itself look less attractive to Microsoft. Nonetheless, there remains plenty of talent at Yahoo, talent that Microsoft would be daft to dispose of. (CNET News.com for both)

On that note, happy Valentine’s Day.