Yahoo's stock prices have declined, so is it possible that they are for sale? And Microsoft is the only company that could afford it and be of any use to them.

http://battellemedia.com/archives/002980.php

Didn't Microsoft propose a Merger once ? And I think Yahoo refused to go through with it.

Wait, If Microsoft and Yahoo do decide to merge, Would the Justice Department (in US) agree,

Yahoo would be too big piece for MS.