Microsoft back on the hunt for small companies

It looks like Microsoft may indeed be turning its attention away from Yahoo and once again looking to buy smaller Internet companies to expand its portfolio.

The British classified site Yell saw its shares tick up today on such a rumor, which came shortly after Microsoft CEO Steve Ballmer said twice in one week that his company is no longer interested in buying Yahoo.

If all true, the news signals a shift in the merger landscape for startup Web firms and their potential acquirers.

As Kourosh Karimkhany of Conde Nast told us a while back, having Microsoft and Yahoo locked in an acquisition dance was good for strategic buyers because it took two serial acquirers out of the game.

At the same time, that situation was not so good for potential targets.

If Microsoft is truly done, both it and Yahoo may get more aggressive about pursuing targets.