The stock seesaw for Yahoo–fueled this time by a story in The Wall Street Journal claiming that former AOL CEO Jon Miller was seriously buttonholing private equity firms for money to buy the Internet giant–continues.

Yahoo shares rose seven percent due to the report, to $11.50, up 76 cents.

Unfortunately for everyone but stock manipulators, the Journal story had a lot of problems, including the highly pertinent fact that Miller has not been actively working on such a deal with any more effort that he had been over the last six months.

The Journal was basically correct that the idea of buying Yahoo (YHOO) has long intrigued Miller, who has not particularly hidden that sentiment, for a long time.

In fact, it is an idea that has drawn interest from many in the media and Internet space.

That is, except Microsoft (MSFT), which many investors still hope will revisit its failed takeover bid for Yahoo.

While a Microsoft spokesman would not comment yesterday, top sources there said they had not been working with Miller on such a deal. The Journal obliquely suggested the software giant might be involved.

Finally, while the Journal did call the Miller effort “informal,” it is actually even more casual than that. No money has been raised and Miller–along with his partner, Ross Levinsohn, in the Velocity Interactive Group–has not been mounting the kind of organized campaign described in the Journal, said several sources.

“Nothing is different now than it was last week, or even months ago,” said one person close to the situation. “It’s a mystery why that story came out now and who would put this out.”

While sources close to the situation BoomTown spoke to today also noted that Miller and Levinsohn have been in many meetings with potential investors about Yahoo, most of those people have sought them out rather than vice versa.

And none of the talks has been serious, as the pair have mostly been spending their time raising a $300 million fund for Velocity.

“When someone asks for a meeting to discuss investing in Yahoo and is credible, it’s not unusual to meet with them,” said one source close to the situation. “There have been a lot of conversations for a long time, but it ebbs and flows and most lead nowhere.”

That’s been especially true since the economy has collapsed and the credit markets have dried up, making it hard for anyone to raise the tens of billions of dollars it would cost to buy Yahoo or any company whose shares have waned.

The prices mentioned by the Journal were also unusually high, from $20 to $22 a share for Yahoo, or $28 to $30 billion in total. That is almost double its recent valuation.

“Anyone would love to get Yahoo for a bargain, but it is a complex and troubled situation too, so it’s also hard to pin down anyone to truly put up the money,” said another source. “No one can put it together and no one would at those prices either.”

But Yahoo remains an enticing target, despite its troubles, given its huge Web traffic and panoply of attractive online assets.

That’s been especially true as Yahoo’s shares have dropped well below $10 a share, from close to $30 earlier this year.

And Miller would be well positioned to take on a Yahoo deal, if it were possible. He has been mentioned as a candidate in its recent CEO search, after current CEO Jerry Yang announced he was stepping down.

Miller was also the choice of Carl Icahn, when the activist shareholder was waging a proxy fight against Yahoo, to lead it. It was a scheme that never panned out, mostly due to Miller’s indifference.

Miller was later Icahn’s top choice for a Yahoo board seat–Icahn got three after he settled with Yahoo and is now on its board.

But a noncompete agreement with Time Warner (TWX), which fired Miller abruptly from AOL several years ago, was enforced by the company, preventing Miller from becoming a director.

That noncompete is in place until the end of March, which would present yet another obstacle to Miller leading Yahoo.

Several sources said Miller has discussed interest in figuring out how to revive Yahoo with Icahn many times and they serve on a board together. But Miller has not discussed it formally with Yahoo leaders or made an kind of approach to the company.

What is most intriguing about the Journal story is why it would appear now, except that dubious Yahoo rumors have become too common of late, all of which have been debunked.

Just last weekend, for example, an inaccurate report appeared in the Times of London that, ironically, had Microsoft and Yahoo in a convoluted search deal, with Miller and Levinsohn as the picks for co-CEOs. All parties mentioned in that full-of-holes report denied it was true.

Full disclosure: Both the Times and the Journal, as well as this Web site, are owned by News Corp. (NWS).

And the media giant has–in the last year–been deeply involved in discussions with both Microsoft and Yahoo about potentially doing various kinds of deals and partnerships with its interactive assets, including MySpace.

[UPDATED: I added a stronger first sentence to leave no doubt about there is no Microsoft-Yahoo deal at the present time and to be clear I am not backing off on my weekend post on the topic.]

Let me be crystal clear: Yahoo and Microsoft are not currently secretly at work on a pricey new search partnership and a piece this weekend in the Times of London that said they were is inaccurate.

It’s natural for the idea to be brought up, since they have talked about such a deal many months ago and have indicated publicly and recently that they should again in the future, so smart betting is correct in guessing that they probably will do some sort of search deal in the months ahead.

But this was put out as a supposedly reported piece, and it was wrong. There is no deal at this time, according to my sources and reporting, which has been pretty accurate overall on Yahoo.

Still, various unsubstantiated rumors pop up weekly about deals between the pair, which are about as convoluted as a mash-up of “Richard III” and “Macbeth,” with some “Three’s Company” thrown in for comic relief.

The core problem is, of course, that for the past year or so with regard to Yahoo (YHOO), truth has indeed been stranger than fiction.

Consider:

A founder takes over after a stumble from a Hollywood mogul, whereupon the sweet-natured Silicon Valley icon also fumbles. But, before he can right himself, what ho!–a dastardly midnight takeover attack by a giant invader from the rainy North.

Then another attack from the greedy East from a sneaky raider named Carl. And, next, a possible rescue from a powerful do-no-evil neighbor that turns into more of a do-some-harm result.

And, all along, more stumbles and bumbles, as the stock slides and employees flee like rats from a sinking ship. The founder founders, while all kinds of plots of usurping unravel around him.

He is, ultimately, banish’d (well, sort of).

You might think all this real-world plot would satisfy even a fan in need of a serious fix, after “Heroes” ran off the rails in its second season.

But no, the false rumors–all wrapped cleverly in some obviously logical suppositions–that have swirled around Yahoo have been breathtaking in both the level of stock manipulation clearly involved and their ability to be swirled around the Internet quickly enough for some vulture to make a killing on an endless willingness to believe anything.

Such was the case this weekend, with yet another story–this time in the Times of London–about Microsoft (MSFT) and Yahoo being involved in yet another hook-up.

Similar previous such reports have turned out to be bogus, but did always give the much beleaguered stock a short-lived bump upwards.

This time out, the Times told about a very complex search deal in detail, worth $20 billion, which was–of course!–imminent.

And–as an added plus, since Yahoo’s other story thread is a new CEO search too–the story also involved a pair of well-known Internet execs–Ross Levinsohn and Jon Miller–taking over as the new managers of the company.

The problem was that top sources at both companies rushed to deny it.

There were also serious insider trading issues for a major investor and board member, Carl Icahn, if it were true. He just loaded up on Yahoo shares a week ago.

And, oh yes, one of the co-CEOs-in-waiting, Levinsohn, told me he was not contacted by the Times (and neither was Miller, as far as he could tell) about his becoming leader of Yahoo.

Thus, he called the tale–on the record, mind you–”total fiction.”

Well, not total fiction, actually, because–as in all things–there has always been a grain of truth to the idea of some kind of deal for Microsoft to buy or monetize Yahoo’s search assets eventually taking place.

And who whispered that juicy nugget to me? Well, actually, both companies have said so loud and publicly many times recently to the whole world. Outgoing Yahoo CEO Jerry Yang did in an onstage interview in early November, as did Microsoft CEO Steve Ballmer in another appearance.

And this week, Icahn said it again in an interview with Barron’s:

“I’ve said this before: Yahoo! should make a deal with Microsoft as far as selling its search capability…Microsoft has said publicly that they are not interested in buying the whole company, and I believe them. But they are interested in doing a deal on search, and we should pursue that.”

That’s pretty clear, I would say, on potential direction. And, it probably means both sides are surely getting there ducks in order to imagine such a deal, which does not take a lot of brain cells to surmise.

The Yahoo leadership that has resisted such a deal is on its way out, although there still remains significant resistance to it by some board members, which Icahn also said was true in that Barron’s interview.

But I would guess that the new CEO will be hired partly on the basis of being able to make nice with Microsoft.

And rather than get caught up in internal Yahoo corporate machinations, as it did to bad results in its earlier takeover attempt, one would assume Microsoft is patiently waiting to do a deal with a more willing team and board, if it can.

After all, it no longer has Google (GOOG) to compete with now that the search giant’s deal with Yahoo collapsed, due to much deserved regulatory scrutiny.

If Yahoo wants a search deal, it has no other real choices save Microsoft (except not to do a deal, of course).

But that kind of simple logic–as in, these corporate deals are more messy and slow than stealthy and well thought out–still seems to escape some.

One grassy-knoll type, in fact, expressed that proof-absent sentiment perfectly in this post about the Times story, which I underscore was not speculative, but represented as actual reporting:

“What we don’t know out of all of this is what’s truth or fiction, despite the latest denials.

Companies and governments like to deny all kinds of things before a deal is magically struck, taking everyone by ’surprise’ yet again thanks to all the denials.”

Yes, it makes perfect sense! All these people and companies, all of whom don’t particularly like each other–including two principals who said they have heard nothing of the deal, despite the fact that they were to be co-CEOs of the resulting company–are all involved in a coordinated plot of deception that rivals anything Jason Bourne could unravel.

But let’s get a dose of reality, shall we? Just because some think there should be a deal between Microsoft and Yahoo and they both publicly indicate there could be, it simply does not count as actionable news, until it actually happens or there is a well-reported story that it is about to.

You can certainly prepare for such a thing and work it into your future stock price formulas, but these rumor eruptions are useless to anyone who cares about being an informed investor.

And if a deal between Microsoft and Yahoo is struck, that does not make the false rumors correct either.

If that was the case, score one for stock manipulators, who are no doubt behind a lot of this stuff.

My second vote for leak candidates goes to under-employed bankers, because–as one smart Internet exec noted to me yesterday–”there are more deal-doers than deals these days.”

Ain’t that the real and confirmed truth, forever and always?

The large round by Oak, which was led by Palo Alto, Calif.-based venture capitalist Fred Harman, will give the popular online news and blog site a valuation of just “south of $100 million,” a source said.

The new funding, the Huffington Post’s third, will be used for expansion of its offerings and the hiring of editorial and business talent.

“There is an inevitable shift from offline to online with people increasingly getting their news media online, and this election proved how powerful the Huffington Post could be,” said Harman (pictured here), in an interview with BoomTown. “And I think the post-election perception of the Huffington Post has changed in the eyes of advertisers to being a key mainstream news site.”

Indeed, the Huffington Post–which is now billing itself as ‘”The Internet Newspaper”–has been hitting on all cylinders during the current election season.

And it hopes to continue building that momentum into the Obama administration, which will give the liberal-leaning site a lot of advantages in coverage.

The Huffington Post has also become a powerful news aggregator, much as the more conservative Drudge Report has, sending traffic all over the Web from its site by linking with a variety of online sites. It also has a strong offering of high-profile bloggers.

But the site’s leaders are also hoping its traffic strength will allow it to be as strong in arenas outside of its flagship political arena, including in business, local, “green” and investigative news.

It will also use the money to make acquisitions, the company said in a press release about the funding, which it put out this morning.

It’s certainly a long way from May of 2005, when its high-profile co-founder, Arianna Huffington, was roundly mocked for launching the site. Today, she has seen her power grow as the site’s traffic and influence have.

The site’s namesake operates out of her California-based office in Los Angeles, while the company has its HQ in New York.

The Huffington Post’s traffic in September 2008, for example, quadrupled from a year before to 4.5 million unique visitors, according to comScore (SCOR). That performance made it the No. 1 “stand-alone political blog and news site,” besting Drudge.

“The cycle of print media is accelerating downward and there are not as many companies with a balance sheet and focus to do it right online,” said Harman, who will join the Huffington Post’s board. “The news market is really up for grabs in a lot of ways…and it is a good time for those who are viewed as authoritative.”

But, like a lot of advertising-reliant businesses, the Huffington Post is also facing a tough market and must show it can compete under more dire economic circumstances and build a sustained and profitable business.

This slug of money should give it a lot of room to do so, said Harman, who has invested in several digital media companies, such as Demand Media and Federated Media. He was also one of the lead investors in aQuantive, the digital advertising business that was bought by Microsoft for $6 billion in 2007.

“Who knows how deep this economic situation is going to be,” said Harman, who noted that he and others kept investing in aQuantive through the last Web downturn. “But strong companies that keep investing through a bad cycle can emerge as winners.”

Previous investments in the Huffington Post have totaled about $12 million. That funding has come from Softbank Capital and Greycroft Partners, as well as seed money from co-founder Kenneth Lerer and former AOL exec Bob Pittman.

Funding reports about the Huffington Post appeared about a week ago in the Times of London, with the post claiming a $15 million investment and expansion into investigative and local news.

But the most detailed posts were done by paidContent, which was the first to name Oak as the new investor and said the round was $20 million.

A report in the Times of London in which Microsoft would buy Yahoo’s search business in a convoluted $20 billion deal that would include well-known Internet execs Jon Miller and Ross Levinsohn, is–in the words of one key player–”total fiction.”

Actually, that’s Levinsohn speaking, on the record. But that’s also the essential word from all key players regarding the Times’s report.

BoomTown has spoken to top sources at Yahoo (YHOO) and Microsoft (MSFT) too and all scoff at such a deal now taking place or that either side has been in any such discussions of late.

Yahoo’s entire market cap, in fact, is only $16 billion.

Rumors of Microsoft buying all of Yahoo have popped up regularly since it abandoned its failed takeover bid, all of which have been untrue.

That’s not to say there will not be some search deal between Yahoo and Microsoft, which seems more than likely at some point.

It makes sense on many levels and is supported by Carl Icahn, the Yahoo board member who upped his money-losing stake in the company last week.

That stock purchase should be enough of a reason for there to be no Microsoft-Yahoo search deal imminent, given Icahn would be more than well aware of it and buying up almost seven million Yahoo shares–now at historic lows–only days ago would smack of insider trading.

Still, the report in the Times has an unusual level of detail, involving Microsoft giving large gobs of money to Levinsohn and Miller.

Wrote the Times:

Under the terms of the proposed transaction, Microsoft would provide a $5 billion facility to the Miller and Levinsohn management team. The duo would raise an additional $5 billion from external investors.

This cash would be used to buy convertible preference shares and warrants which would give it a holding in excess of 30% of Yahoo.

The external investors would also have the right to appoint three of Yahoo’s 11 board directors. The talks with Yahoo involve Microsoft obtaining a 10-year operating agreement to manage the search business. It would also receive a two-year call option to buy the search business for $20 billion. That would leave Yahoo to run its own e-mail, messaging, and content services.”

Sounds good, except it’s the first time Levinsohn has heard of the plan, he said. Sources at Microsoft and Yahoo also said there was no deal like that in the making at this point in time.

Earlier this year, there was also another deal involving Icahn, before he gave up his proxy fight against Yahoo in exchange for a board seat, which did involve Levinsohn and Miller taking over Yahoo.

But, as has happened to many schemes involving Yahoo, it never came to pass.

Interestingly, there was also a similar investment deal as the one described in the Times, many months ago, just after Microsoft had walked away from its takeover battle for Yahoo.

It involved a very complex transaction involving Microsoft buying a large stake in Yahoo shares, running Yahoo’s search business for a time period and giving Yahoo a huge guaranteed revenue stream.

But that deal had already been spurned by Yahoo for the search-ad deal with Google (GOOG), which collapsed recently under intense regulatory scrutiny.

That has focused a lot of attention back on a possible deal between Yahoo and Microsoft, the No. 2 and No. 3 players in search, both of which have been chasing Google without any success.

Microsoft, despite spending billions, has been lagging badly behind Yahoo, which has more than doubled its share.

And that is precisely why it has long been interested in acquiring Yahoo’s search business.

Microsoft CEO Steve Ballmer has said the software giant is not interested in buying Yahoo many, many times, although he has not ruled out a search deal of some sort.

But Microsoft, many sources said, has been waiting for Yahoo to get another CEO in place, after Yahoo CEO Jerry Yang recently said he was stepping down to make way for a new leader.

Yahoo has also said in recent days that it is not currently engaged in any kind of talks with Microsoft, even about a more likely search deal.

At least in this chapter of the drama that has engulfed Yahoo over the last year, believe them.

[Full disclosure, though run separately, The Times of London is owned by News Corp. which also owns this Web site.]