Microsoft Corp. said Sunday it's talking to Yahoo Inc. about a possible transaction after the two failed to reach an acquisition deal earlier this month.

The Redmond, Wash.-based software company said in a news release that "Microsoft is considering and has raised with Yahoo an alternative that would involve a transaction with Yahoo but not an acquisition of all of Yahoo."

"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," the statement said.

On May 3, Microsoft walked away from a $47.5-billion US offer to buy the web pioneer. Since then, billionaire investor Carl Icahn has launched an effort to oust Yahoo's board of directors.

A Microsoft spokesman declined to comment beyond the statement. Yahoo representatives could not immediately be reached for comment.

The statement may be a sign that Yahoo founders Jerry Yang and David Filo and chairman Roy Bostock are scrambling to avert an ugly shareholder mutiny ahead of the company's annual meeting on July 3.

Icahn has proposed his own slate of directors to replace Yang, Bostock and the rest of the board in hopes of bringing Microsoft back to the bargaining table. The results of his efforts would come to a vote at the meeting.

Many analysts believe that despite Microsoft's assurances it is moving ahead without Yahoo, the software maker would revive its bid, likely at a lower price, if the web company's stock continues to languish.

Icahn has told Yahoo's board it could quickly quell the shareholder revolt by renewing negotiations with Microsoft, but the software maker warned Sunday that it's possible no deal will be struck.

With files from the Associated Press