Microsoft offered $35/shr for 16 pct Yahoo-sources

SEATTLE, June 12 (Reuters) - Microsoft Corp (MSFT.O: Quote, Profile, Research, Stock Buzz) offered to pay $35 a share for a 16 percent equity stake in Yahoo Inc (YHOO.O: Quote, Profile, Research, Stock Buzz) as part of an alternative deal that would have involved the sale of the Web company's search business, sources close to the deal said on Thursday.

The details of the proposed transaction came to light after Yahoo said earlier Thursday that all talks with Microsoft had concluded without a deal.

Microsoft's proposal -- an alternative to a full acquisition of Yahoo -- also involved a "commercial agreement" between the two companies, said sources, who would not elaborate on the nature of the agreement. (Reporting by Daisuke Wakabayashi; editing by Jeffrey Benkoe)