While this scenario is possible, any activity that would drive the price down will attract other potential buyers - say, Apple, for instance.

That combination would be a rather startling addition to the evolving/future user application market. MS has spent large sums of money on server class products and a failed desktop OS rollout (probably the last in the company history). They want to get into the fight with Google and can't get out of their own way to make a play in the SaaS model world. They can't even come close to catching up with Google unless they leverage all of their horsepower to build a Google-like delivery capability.

Apple could buy their way into that game and shoot past MS. They would immediately have a 2nd place slot behind Google and block MS from quickly getting into that game (translation = MS will have to spend time and money after changing their corporate culture to properly deliver a SaaS user experience).

Apple can leverage the Yahoo engines, the Zimbra (open source) mail engine, and their own BSD based desktop operating system to create a seamless user experience (interface and guts). I would bet many of the Yahoo shareholders would take any offer from Apple over a MS low-ball offer any day of the week.