Yahoo shares rose in intraday trading Monday on reports that the company is in preliminary talks for an advertising partnership with Microsoft.

Yahoo's stock was up as much as 7.6 percent to $14.49 in early morning trading, a level it hasn't seen since early October. Yahoo's gains also went against the tide of the broader markets, which were down in morning trading.

The bump in Yahoo's share price follows reports on Friday that the Internet search pioneer has had discussions with Micro...