What's it gonna be: Yahoo meltdown or MS Yahoo?

This story started earlier today with Google announcing Ending our agreement with Yahoo. This was the worst possible news Yahoo could get. They are weaker than last year. Google made them weaker by helping them imo. Why? because Google wants weak players behind it, not strong ones. Yang indoctrinated by anti Microsoft propaganda from the 80's still see's them as evil. But Microsoft now is not the Microsoft of 20 years ago.

I have been a bit of a fan boy of an MS Yahoo deal. Even last year when Yahoo was stronger than it is now, I saw Yahoo as too weak, but a Microsoft Yahoo pairing as a very good second player to Google. Teaming up with an AOL is an awful idea imo. I feel that Microsoft and Yahoo have great stuff and if they can remove the small overlap and go for the best options and be bold very damn bold they could go places. I also think Microsoft should buy RIM (Blackberry). People say MS is not a hardware house. But if RIM is a separate division who cares... and what about the overpriced but very cool MS coffee table?

Anyway Matt Marshall of Venture Beat is reporting that Yahoo's Jerry Yang may be on his way out today and that an MS negotiation could be back on the table. Seemingly an internal memo is doing the rounds at yahoo telling them to expect a major and historic announcement. This should happen in the next 2-5 hours. It's nearly noon PST right now 7pm GMT in Europe.

This is all opinion, but if Microsoft respects Yahoo but that they are much more aggressive on the market I see this working.

Update: Kara Swisher says we are talking baloney. Yahoo Rumors, Rumors All Around, But Not a Drop Correct. I have to say Kara is like my mom usually right ;(