The recently appointed chief marketing officer Elisa Steele is spearheading the rebrand, with speculation that the overhaul could have been the reason why the January unveiling of the new homepage was delayed.
The front page relaunch was put on hold soon after chief executive Carol Bartz took over the top job at the internet company at the start of the year.
Steele was appointed by Bartz in March as part of a wider company restructure.
The news comes as Microsoft chief executive Steve Ballmer reignited speculation of a possible partnership with Yahoo!
In a speech at the Cannes Lions advertising festival on Wednesday (June 24), he refused to rule out that he was interested in a search partnership with the second-biggest search engine.
Microsoft recently launched Bing, a search engine rival to Yahoo! and Google.
Yahoo! Was not available for comment at the time of publishing this story.