Yahoo (YHOO, $12.83, up $0.64) is trading higher this morning after one of the company’s largest shareholders has made a plea for the company to pursue a sale of its search unit to Microsoft (MSFT, $20.77, up $0.17). Ivory Investment Management owns a little over 21 million shares of Yahoo, or about a 1.5% stake, and like everyone else who owns Yahoo stock, Ivory is growing tired of Yahoo’s antics.

Ivory said Yahoo could get about $15 billion from Microsoft for the search platform alone which would put the stock at $24 to $29 a share, if a deal got done. In a letter to the company’s board, Ivory proposed a deal in which Microsoft would acquire Yahoo’s search engine and Yahoo would retain 80% of the revenue generated by search queries on its own site. In other words, Ivory is pushing for a double from current prices.

We have been following Yahoo’s troubles all year long and its hard to get excited when something like this pops up. If Microsoft really wants to get something done, it would have been aggresively buying up Yahoo’s shares when the stock was under $10. Perhaps Microsoft is waiting for a total collapse on Yahoo’s part and will pick up the pieces when we least expect it.

Rick Rouse