Before talking about what companies Yahoo could buy, it's worth asking the question: What can it afford? On its balance sheet, Yahoo currently has just over $4 billion worth of cash, but this number is deceiving. Some of this is still pledged to repurchasing shares -- last year, Yahoo made a $3 billion commitment to buyback much of its own stock.
But Yahoo could raise much, much more. A number of sell-side analysts have, in recent weeks, upgraded the stock on the possibility that it could sell off its Asian assets: its remaining stake in Alibaba, and Yahoo Japan. Combined, these could net the company over $20 billion, according to Cantor Fitzgerald. With that sort of war chest, Yahoo could go after all but the largest tech companies.
Slightly Incorrect, they have $6.8 Billion in cash and short term securities at 12/31/12. They spent $600 on stock from 1/1/13-2/28/13. the buyback per their annual report has $2.5 billion left. Leaves them with $3.7 billion excluding asian assets.