Jerry Yang's resignation as chief executive of Yahoo opens the door wide for another Microsoft offer, analysts and shareholders said this week.

"I would expect Microsoft to come back within the next three or four months," said Eric Jackson, an activist Yahoo shareholder who was among the investors who criticised Yahoo's management for not accepting Microsoft's previous bid. "I think Microsoft will come back because Microsoft needs Yahoo, despite what they've been saying publicly, and I think they know that," he added.

Financial analysts also were positive about the possibility. "We still believe Microsoft will eventually own Yahoo. Jerry moving out of the CEO role may accelerate this," UBS analyst Benjamin Schacter said. "Yahoo is a key strategic asset in the online space, and given the scarcity of key players of size, we see value here not reflected in the stock's current valuation."

Bank of America's analyst team expects a deal with Microsoft, too, but a narrower one. "We continue to believe a search deal with Microsoft is possible, but do not rule out an all-out deal for the company," the group said.

A former Yahoo executive who asked not to be named also predicted that Microsoft would come calling, now Yang is not at the helm.

"There was a lot of bad blood during the last discussions between Yang and Microsoft executives," he said. "I would assume that Microsoft's search business cannot do well on its own. Yahoo's [search business] cannot do well on its own, and it makes a lot of sense to combine." The executive said Microsoft would be unlikely to want all of Yahoo; just the search business.

Earlier this month, Microsoft chief executive Steve Ballmer threw cold water on a Yahoo deal. Despite Yahoo's deflated stock price, he's not interested in "going back and re-looking at an acquisition".

"We tried at one point to do a partnership around search, not advertising. That didn't work either, so we moved on, and they moved on," he said at a Committee for Economic Development of Australia lunch in Sydney on 7 November.

However, neither Microsoft's nor Yahoo's search businesses have made much progress in competing against Google, and both could use a boost in a downturned economy.

"Even with the bad economy and decline of Microsoft's stock price, this is a deal that makes strategic sense," Jackson said. "It's a natural time given this move for Yahoo to reassess. The board is feeling incredible pressure and guilt and anger from shareholders for passing on the deal before."

And Microsoft would get a deal this time, he predicted. "Yahoo shareholders now would be over the moon if they could get US$20 a share, which is where stock was at a few weeks ago," he said.

CNET News.com's Stephen Shankland contributed to this report.