According to stories that ran on Friday and Sunday in the Wall Street Journal, both Microsoft and Google are potentially going to bid for Yahoo. Various unnamed sources and “people speaking on condition of anonymity” told the WSJ that Microsoft is planning to act as source of financing for others in exchange for preferred stock and some “influence” over Yahoo’s future:

Microsoft Corp. may help to bankroll a potential joint bid for Yahoo by extending loans to its deal partners and buying preferred stock in Yahoo . . . The software giant has been in discussions about a potential joint proposal for Yahoo with private-equity firm Silver Lake Partners and the Canada Pension Plan Investment Board, people familiar with the matter have said . . .

Microsoft is not seeking full ownership of Yahoo, but rather acting in effect as a financier partly in exchange for being able to retain some influence over Yahoo’s future

On the other hand Google is doing something similar but with a more direct interest in Yahoo and its network according to the WSJ. Potential reasons cited by the publication for Google’s interest include the following:

Google wants to sell ads across Yahoo’s display inventory

Google wants to build more direct relationships with Yahoo’s “premium” publisher partners

Google wants to bring Google+ to Yahoo users

Google wants to make Microsoft’s life harder and its bid more expensive

Meanwhile Yahoo co-founder and board member Jerry Yang has said that a sale of Yahoo is not a foregone conclusion and that the company has other options to realize value for shareholders. It’s not clear what those might be however. China-based Alibaba Group, which is now partly owned by Yahoo, and Russia’s Digital Sky Technologies are also among the potential bidders.

Any deal involving Google will be subject to close federal review. However that’s less likely with Microsoft in the scenario described above. Regardless of who winds of owning Yahoo, it will take vision and inspired leadership (not merely competent management) to reverse the long, slow decline that has taken hold at the company.

Stock image from Shutterstock, used under license.