Game-Changer for Microsoft

Give Microsoft(MSFT Quote) CEO Steve Ballmer credit for the scale of his ambition.

On Friday, The New York Post reported that Microsoft had recharged talks to buy Yahoo! (YHOO Quote) for as much as $50 billion. The deal would put a steep premium on Yahoo! shares, which soared more than 18% to $33.38 in midday trading on Friday. Microsoft was off 1.6% to $30.48.

Both parties have refused to comment on a potential deal, the possibility of which has been mulled for quite some time now. But an acquisition of Yahoo! by Microsoft could make more sense than ever, given recent events.

Last month, Microsoft backed down from a bidding war and let Google acquire online ad tech firm DoubleClick for $3.1 billion. And after Yahoo! acquired display ad auctioneer Right Media earlier this week, the markets were rife with speculation about which boutique online ad play Microsoft would logically make next.

But while commentators focused on small players such as ValueClick (VCLK Quote) or Aquantive(AQNT Quote), it seems Microsoft may have been thinking big all along.

And though Microsoft has typically avoided big acquisitions -- skeptics rightly note the complications of a huge deal meshing contrasting cultures -- a buyout would present Microsoft with the boldest of a rapidly dwindling set of options.