Apple does have a lot stashed away in the bank, not enough for Yahoo, but it’s been sitting on that money for ages and could do with buying in some more teams. But I can’t see who the other partners would be and how they wouldn’t manage to get in Google’s way.

Difficulty is for those that want to bid against MS, is that Yahoo! is probably worth more to MS than any other company. So who would pay more to acquire the company?

Now… the only wrinkle on that is that there may be all sorts of companies that don’t want to see Yahoo! get bought by MS. And this is the kind of situation where people start paying more for companies than they’re worth.

The list of companies that could buy Yahoo! are MS competitors that have a market cap north of $100B (includes Apple); and Google (but anti-trust issues for the GOOG buying Yahoo!). Also, companies that want to own big destination sites, like News Corp. And maybe even a mobile phone company or two.

But still, all these guys have to be prepared to outbid MS… and MS has deep pockets.

Be really interesting to see how this one works out… The top-level view of a combined Microsoft-Yahoo! is pretty interesting - gives them an amazing position in: hosted e-mail, instant messaging and photosharing… and, most importantly of all, puts them in a significantly better position to compete with Google in search and advertising (especially search advertising).

If this bid fails, and rumors are suggesting it will, it will damage MS in the long term as it’s basically an admission that they’ve messed up their search and ad strategy badly - nice one Orang-utan man Balmer and Gates, one more last cock-up before they both leave…