Yahoo! (NASDAQ:YHOO) has been the subject of quite a few news headlines (not to mention rumors) during the last couple of days. It seems to me like it's a tempest in an AT&Teapot.

Last Friday, The Wall Street Journal reported that AT&T (NYSE:T) and Yahoo! are looking into changing the terms of their deal. If you recall, the two have a co-branded DSL service, which of course might be looking pretty dated now that broadband adoption is the rule and not the exception.

It's understandable that investors felt some degree of alarm, especially since the buzz became increasingly alarming as Friday wore on (ensuing headlines screamed out words like "end," "divorce," "frayed," etc.) and the stock plunged. Granted, there's a lot at stake: The AT&T deal represents a chunk of high-margin revenues in the neighborhood of $200 million to $250 million for Yahoo!, according to the WSJ. However, while the outcome of any changes may be significant, it seems like investors really hit the panic button on that news report, especially since it cited those famously nondescript "people familiar with the matter."

The uncertainty has continued, despite the fact that the companies did some damage control, issuing a joint press release on the matter. They said they are constantly seeking ways to expand their business relationship, and some of the latest developments included the introduction of advertising on their co-branded portal earlier this year, plans to include advertising on their co-branded email service, introducing Yahoo! on AT&T's IPTV later this year, and the possibility of expanding their relationship into cell phones, given the fact that AT&T now owns 100% of Cingular.

Even so, speculation continued into Monday as commentators kept kicking their relationship around (much like the "are they or aren't they" headlines about Brad and Angelina, before it became clear that they were). There's even a theory floating around that maybe AT&T itself had leaked the information in order to gain an advantage in negotiations. That may well appeal to the conspiracy theorist in all of us, but hold on a second -- maybe this is short-term hysteria and investors should look at the big picture?

After all, Yahoo! has many strengths. Tom Gardner pointed to these strengths when he recommended it in the August 2006 issue of Motley Fool Stock Advisor. Despite the fact that Yahoo! often gets compared unfavorably to rivals like Google (NASDAQ:GOOG), and a significant hit to its revenues would be unwelcome, Yahoo! has a strong balance sheet, a well-known brand, and a formidable user base, not to mention some initiatives in the works that could be helpful, like Panama and Yahoo! Go for Mobile. Lately it seems like investors often forget Yahoo!'s strengths while obsessing over any signs of weakness.

For more on Yahoo!, see the following stories:

Yahoo! is a Motley Fool Stock Advisor recommendation, while AT&T is a former pick of that service. Microsoft has been selected by Motley Fool Inside Value.

Alyce Lomax does not own shares of any of the companies mentioned. The Fool has a disclosure policy.