Updated below: More on the Yahoo board meeting discussing the Microsoft (NSDQ: MSFT) offer and other options:

-- Kara reports it was not an in-person meeting but on the phone, and that the board will meet again on Wednesday in person to discuss the situation.

-- Yahoo has bolstered its banker ranks, and hired Moelis & Company, a high-profile west coast M&A boutique, reports FT. This is in addition to Goldman Sachs and Lehman Brothers that are already working with Yahoo (NSDQ: YHOO). Based in Los Angeles, Moelis & Co is run by Ken Moelis, and advised Ron Burkle, the LA billionaire investor (and Yahoo board member) on his unsuccessful efforts to buy Tribune.

-- WSJ reports, citing people familiar with the matter, that among the topics discussed on the phone meeting was a search ad outsourcing pact with Google (NSDQ: GOOG). Such a deal has been discussed as a possible Microsoft defense, since it could lead to a revenue boost, though it might also raise fresh antitrust concerns. And it’s not clear that doing this would satisfy shareholders: It’s hard to imagine the market reacting favorably if the company came out and said it was rejecting a $44.6 billion bid, representing a 62 percent premium, in favor of an ad outsourcing pact. The board also discussed, according to the report, a strategy for wringing a higher offer out of Microsoft.

-- Updated: The planned Yahoo job cuts will be starting coming Tuesday, with the managers possibly finding out tomorrow who is on the list, reports News.com, citing sources. Not sure how the layoffs and the bid discussions will be managed together, but seems like Yahoo has to go ahead with it, just to show its willingness to bring about the changes it has promised.