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The rumour mill has swung into action and selected top gear after Microsoft's bid for Yahoo last week.

Rumour One: Google's CEO called Yahoo CEO and founder Jerry Yang, offering an alliance to starve-off Microsoft (multiple sources, including the Guardian and numerous blogs). This is rumoured to include Yahoo out-sourcing search to Google and focusing on its IM, email, community (Flickr, Yahoo Answers etc) and display advertising businesses. A complete u-turn for Yahoo, which dumped Google and bought AltaVista and Inktomi to develop its own natural search engine and acquired Overture for paid search.

I'm sure long term Yahoo shareholders will be thrilled at the prospect of that blast-from-the-past-strategy - which stills leaves the company vulnerable in future, and little more than a baby sucking at Mother Google's teat.

Rumour Two: Microsoft will stage a board room coup if Yahoo reject their offer. Possible, and a quick way of making the deal happen.

Rumour Three: Google have been contacting other online media powerhouses including AOL, Comcast, AT&T, News Corporation and IAC to see if they are looking to enter a bid for Yahoo (IAC have enough problems of their own at the moment)

Rumour Four: Yahoo could be split up and divisions auctioned off. Seems entirely poossible if enough shareholders have lost their appetitie for the company and want to cut their loses - with Microsoft a potential purchaser of Yahoo Search Marketing and Yahoo Search Technology.

CityWire, mean time, thinks we all hate Windows and therefore Micro-Hoo! will fail anyway. I disagree - many people still like Yahoo, still have Yahoo mail addresses, use Yahoo Messenger and upload photos to Flickr. If MS kept the Yahoo! brand (and dumped Live!, which barely anybody has heard of outside the industry), they could build a search powerhouse.

Of course, by the time you have read this, there will be more rumours...