San Francisco  - Microsoft's latest deal proposal to Yahoo envisages the internet portal selling off its valuable properties in Asia and the purchase by Microsoft's of Yahoo's search business in the US, the Wall Street Journal reported late Monday. Microsoft also proposed buying a minority stake in the whittled down Yahoo that would remain after the sell-off.

Details of the proposal came a day after Microsoft announced that it was resuming its effort to team up with Yahoo, though it stressed that negotiations were not aimed at a transaction for the takeover of the web portal.

However, quoting people close to Yahoo, the report said that the Yahoo board was unlikely to favour the latest proposal.

Before details of the offer were publicized analysts said that the talks also offered both Yahoo and Microsoft the change to resurrect talks about a takeover without losing face.

"A near-term deal could act as an intermediate step that would go a long way toward testing the waters," investment bank UBS wrote in a research report.

Microsoft has been pursuing Yahoo as a bulwark against the growing domination by Google of online advertising and software. It abruptly ended the previous negotiations at the start of the month, after Yahoo rejected its 47.5 billion dollar offer, valued at 33 dollars per share. Yahoo held out for a price of 37 dollars a share.

The failure of those talks prompted an attempt by corporate raider Carl Icahn to take control of Yahoo by ousting the board at the company's annual general meeting on July 3.

"It is quite obvious that Microsoft's bid of 33 dollars per share is a superior alternative to Yahoo's prospects on a standalone basis," wrote Icahn in a letter to Yahoo Chairman Roy Bostock. "I believe that a combination between Microsoft and Yahoo is by far the most sensible path for both companies and more importantly would be a force strong enough to compete with Google on the internet."

Icahn offered to back down from the proxy battle if Yahoo revived the takeover talks with Microsoft, but it was unclear whether the more limited negotiations would satisfy that demand.

In a statement late Sunday, Yahoo said its board is exploring several "value maximizing" alternatives and "remain open to pursuing any transaction which is in the best interest of our stockholders." (dpa)