Every investor has an “if only” trade, the missed opportunity that sits in the memory bathed in the glow of what might have been. For owners of Yahoo stock it was the chance to sell out when Microsoft was interested in paying $33 a share in 2008, particularly as the share price has bumbled stubbornly along at less than half that level for most of the 21 months chief executive Carol Bartz has been in charge. So it is little surprise that a new bout of deal speculation has pushed shares in the online company up by a tenth in two days.

After all, Yahoo is cheap. Net cash plus stakes in Yahoo Japan and Chinese search engine Alibaba.com are worth perhaps $13bn after tax, or about $9 per share. Having Microsoft run the technology behind Yahoo’s search results, and a cost-cutter in charge, means operating margins are forecast to jump this year to 17 per cent from the 9 per cent made last year. Assume, as UBS does, next year’s earnings from Yahoo’s remaining businesses are in the region of 50 cents. At today’s $16 share price an acquirer is looking at 14 times earnings for the largest online display advertising company.

Dismiss some of the wilder rumours though. Merging Yahoo with AOL (market cap $3bn) makes no sense, whatever the management skills of AOL head Tim Armstrong. This would just be more cost-cutting, demoralisation and distraction for temporary gains in profit while competitors Google, Facebook and Microsoft busily stake out their place in the online ad market. With the “if only” still lingering, a twenty-something share price would likely be necessary to close a deal and there is no sign of $25bn-plus private equity offers returning. Any buyer would also need a solution to the still unanswered question: what exactly is the most popular US website trying to be?