After a bombshell from Yahoo late yesterday that it would test Google's AdSense on some of its search results, Microsoft, AOL and News Corp. all found themselves swept up into the Microhoo madness.

According to a Reuters report, Yahoo is "closing in" on a deal with Time Warner's AOL that would give Yahoo an injection of cash in exchange for a 20 percent stake in the company. But meanwhile, The New York Times is reporting that News Corp. is in talks with Microsoft to join its earlier bid for Yahoo.

Kara Swisher, at BoomTown, jokingly referred to the news -- which virtually every major internet company has been sucked into covering on the Microhoo soap opera -- as nothing short of the rapture. But jokes aside, Swisher put the latest rumors into perspective.

While Microsoft may have flown off the handle at the idea of Yahoo and Google joining forces -- even for a limited test -- the truth is that such a marriage would almost certainly be thwarted by regulators in Washington. As for teaming with AOL, that move would seem to be a jump from the frying pan into the fryer, according to Swisher, who called the idea a "potential disaster."

Of course, Swisher isn't alone in her assessment of an AOL/Yahoo deal. For the past few months, AOL has been stumbling and bumbling as it tries to build an advertising business out of a Frankenstein-style collection of companies. And that process hasn't been pretty, costing AOL top advertising talent in the form of Tacoda founder Dave Morgan, former Platform-A chief Curt Viebranz and Kathy Kayse, VP of marketing solutions for Platform-A.

As for Rupert Murdoch, who previously said he would have no part in a Yahoo deal after first presenting himself as a potential white knight, there are probably more questions than answers. A seasoned veteran of mergers and acquisitions -- and a big digital player in his own right -- it's little wonder that the mogul doesn't want to be left on the sidelines. But why Microsoft would let Murdoch into the deal remains unclear.

The big winner?
While Reuters is reporting that the prevailing wisdom on Wall Street seems to be that Microsoft ultimately will gain control of Yahoo, the true winner in this epic battle may in fact be Google. If and when Microsoft reaches a deal with Yahoo, it will have to kiss and make nice to overcome some of the nasty wounds suffered during the two-month long battle. And that olive branch will only be the foundation of what promises to be one of the more difficult integrations in corporate history, as Microsoft looks to figure out how to match its strengths with those of Yahoo.

But all of that is putting the cart before the horse. While Microsoft and Yahoo, which both started the year well behind Google, spent the first quarter bashing each other, Google has been given time to extend its lead and address some of its own nagging concerns without a competitor nipping at its heels.

In the last few weeks, Google has suffered a backlash from some AdWords advertisers, who charge that the program has seen a spike in price and a drop in conversions. At the same time, Google has been working hard to reign in its paid clicks controversy, which many on Wall Street believe could be a sign of a weakening U.S. economy. But perhaps the biggest gain for Google has been breathing room to complete its DoubleClick acquisition, which has required some nasty workforce reductions.