Yahoo Japan sold back to Softbank, or a swap for Alibaba shares, to give a nod to mb, and also for tax reasons. Then rest of Yahoo to Microsoft, and Alibaba interest to eBay - both great synergies. Wild cards are Apple and Facebook wanting the whole shebang minus Yahoo Japan. Or PE getting involved with AOL and other parties. Still believe it's going to happen -?complicated so takes time - target price sum of the parts: $25 +/- three bucks.
My guess is MSFT too... I can not see anyone else since you are right, with the search engine deal and cost trimming.... all points to a sale to msft. This will be a great buy for msft to fortify its search and display ads position and give Google a honest competition. This merger will also give the tech sector a much needed boost. I think tech is getting tired of the larger companies are not consolidating. The question is that will it be announced on next Tuesday?