First Microsoft - Yahoo! Rumors of 2009

A new year, and a new Microsoft - Yahoo! rumor, although one involving a complicated deal, according to TechCrunch. Call it the first such rumor of the New Year.

According to the report, citing information from anonymous sources, a group of "well-known Silicon Valley executives and top investment bankers" are involved, and:

Under the terms of the proposed deal, the investment group would make a takeover bid for Yahoo at a relatively low premium of around 20% to its current price of around $13 per share, valuing the company at just over $20 billion. A complicated financial structure would be put in place to finance the deal, but the bulk of the cash for the transaction would come from Microsoft as debt.

Right, the bulk of the cash would come from Microsoft's burgeoning cash reserves. And for what? What does Microsoft get out of the deal.  Well, first Microsoft would get a fixed rate of return on the debt obligations. But also, according to the report, Microsoft be sold Yahoo!'s search and search marketing business with terms similar to what Microsoft proposed last June.

Thing is, the more complex any deal is, the more likely there will be problems. Additionally, it's still in the proposal stage; Microsoft hasn't agreed to anything yet. In fact, according to All Things Digital, Microsoft told them the following:

"We can deal directly with Yahoo, which is moving through a process to get a new CEO, and when the time is right, we will deal with their leadership. Getting involved in some convoluted deal with others in control…it’s idiotic."

The more complex a deal, the less sense it makes, and the more problems it poses. Label this a long, long, longshot for now.