Microsoft (News - Alert) is looking to buy out Yahoo, if we go by the rumors spreading across the Web. According to bloggers, there are strong reasons to believe these rumors.

Recently Kevin Johnson, president of platforms and services at Microsoft, revealed the company’s goal to be in one of the top two positions in the online search domain goal at a UBS investor conference in Seattle. He also said that Microsoft hopes to achieve 30 percent market share in this area.

According to analysts, it is almost impossible to achieve these goals in the near future. So they have been interpreting the Johnson’s statement as code that Microsoft is eyeing Yahoo, which is the only way to secure a place in one of the top two slots. According to former Wall Street Analyst Henry Blodget, Microsoft could not achieve this goal in any other way as it currently commands less than 10 percent market share in the online search market. He says the rising share price of Yahoo points towards this move.

Blodget points out in his blog that Microsoft is losing a billion dollars a year in this area and has not made any improvement since it treaded this domain 12 years ago. In both market share and advertising revenue, Google (News - Alert) and Yahoo are much ahead of Microsoft. Google has almost monopolized the domain with 67 percent market share and Yahoo has to contend with 19 percent, in the stiff competition with Google.

Even taking the acquisition route, no other acquisition could take Microsoft to second position, let alone 30 percent market share. Simple arithmetic shows its 9.2 percent market share, as computed by the site analytics firm Compete, will move near 30 percent only when Yahoo’s figure is added. Blodget argues in his blog that the announcement of Johnson Thursday triggered a six percent shoot up in Yahoo’s share price Friday.

As part of its goal, revealed at UBS investor conference, Microsoft wants to capture 10 percent of all Internet page views from about the current 6 percent. It expects its Web site MSN.com and online service Windows Live to contribute for this gap. Along with page views, it also wants the use users to stay more time with it from the current 17 percent of the total time spent on the Internet to 20 percent.

According to Johnson, Microsoft also wants to enhance the relevance of its Web search results. By working our minute details in all these areas, Microsoft aims at getting 40 percent of the entire global spending from all the digital advertising platforms.

Coming to the other online moves, Microsoft started to stretch its muscles in the domain in November 2005, when it started building out more online services. It purchased digital services company aQuantive (News - Alert) for $6 billion in August 2007. Recently, it has picked up a stake in Facebook. And it has started promoting Windows Live in a big way.

Microsoft and Yahoo have decided not to comment on the rumors.

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P R Sai is a contributing editor for TMCnet. To see more of his articles, please visit his columnist page.