What a Microsoft acquisition of Yahoo! would mean

Some stories are coming out that point to Microsoft attempting to purchase large amounts of Yahoo! stock. The spin on this is that Microsoft wants to compete head to head with Google more effectively. This logic strikes me as a bit, well illogical. I can see Yahoo! wanting to secure the financial wherewithal to compete with Google on a larger scale but Microsoft has always had the option of doing as much or more than Google but has seemed content (until recently?) to not really get into Google's core businesses of, information, search and advertising.

Some ideas have Microsoft spending nearly $2 billion in the coming fiscal year toward building an ad-supported online service business, or selling its MSN network to Yahoo! for a minority stake in Yahoo!

This type of a merger makes a lot of sense, though I don’t think I would like to see it be more than an infusion of cash into Yahoo! or an elimination of MSN (in favor of Yahoo).