Although your idea is intriguing, I think in such cases the simplest explanation is probably the one closest to the truth. Yahoo had just announced lackluster results and their stock price was considerably lower than even a couple of months ago. It was great timing from Microsoft that allowed them to offer a significant premium to the price the stock was trading at. Anyway, as others mentioned before, a merger between Google and Yahoo would probably be blocked on anti-trust grounds.
The BrownFury writes "At an invitation only event Apple has released their new MP3 player called the iPod. iPod is the size of a deck of cards. 2.4" wide by 4" tall by .78" thick 6.5 ounces. 5 GB HDD, 10 hr battery life, charged via FireWire. Works as a firewire drive as well. Works in conjunctions with iTunes 2. Here are Live updates". No wireless. Less space than a nomad. Lame.