There are always tons of rumors about Microsoft buying Company X, but it looks like Microsoft is officially wanting to acquire Yahoo! They've been really trying to build some market share with their Live initiative and it looks like they're really serious about becoming a major portal player.
Quite frankly, it doesn't surprise me that Yahoo! was looking at selling. Most companies to some "spring cleaning" by trim staff before being acquired. I saw it happen when I worked for Midwest Micro and I've seen it happen at just about every other large company I've witness sell their business.