And then there were two! If the rumors are true and the factions in Microsoft get their way, the battle for search engine supremacy could become a game with only 2 significant players, Google and MSN.

WSJ (Wall Street Journal) have bandied around suggestions that Microsoft has been exploring the option of acquiring the Yahoo! portal and search engine. Such a move would significantly bolster Microsoft’s search engine market share, and create a strong basis to compete with Google head on.

Referencing undisclosed sources, the Wall Street Journal claims that a group within the Microsoft camp is lobbying strongly to have the company buy a stake in the search provider, but apparently the plans are currently on hold.

Whether the “on-hold” statement is just an attempt to shake the hounds off the scent will be realized soon enough, but considering the large investment Microsoft has already placed in its own MSN and Live offerings, such an acquisition would appear to be against there existing strategic direction.

Bear in mind that Yahoo! is currently worth about $45 billion, so it’s no small acquisition by any means. Considering Microsoft’s recently publicized pledge to invest significant funds in there own search and online software developments, it does seem unlikely in the short term, but who knows in these unpredictable times. It could be the ace card that Bill Gates has up his sleeve. The whole deal also requires the buy in from the Yahoo! shareholders, so there are many factors influencing its success.

Anyway, while speculation of partnership and acquisition surrounds Microsoft and Yahoo!, one thing is for sure, the Google team will be watching with bated breath!

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