Game-Changer for Microsoft

A Yahoo! acquisition would give Microsoft additional firepower against Google as it moves to lock in additional advertising media.

Of course, pulling off such a huge deal won't be easy. For one thing, big acquisitions have a history of failing.

But the difficulty of integrating would be further exacerbated by the difference in cultures between the two companies. Known for its disciplined culture, Microsoft is perhaps the most orthodox corporation in a generally freewheeling tech sector. Yahoo!, with a campus drenched in garish yellow and purple, is the only Fortune 500 company with an exclamation point in its name.

Yahoo! founder Jerry Yang reportedly will not use Microsoft products, and concerns about a culture clash forcing a possible exodus of Yahoo! employees after such a deal have reportedly tanked talks about a merger before.

Still, the reality for Yahoo! is that it's increasingly outmatched by Google's growing legions of employees and piling coffers. A deal with Microsoft would put enormous resources behind Yahoo! -- however crudely. And it would immediately give a boost to Microsoft's presence in the Internet ad market.

But if a merger does eventually get done, neither company will acknowledge the most compelling logic for it: Things were looking pretty bleak as they were.