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Once upon a time, Microsoft was willing to pay around $45 billion for Yahoo.  All sorts of shenanigans have taken place since then, but the main sum remains untouched, and a new rumor has it that a stock buyback may be in the works.

Steve Ballmer stated in June that he won't go on an acquisition binge in order to compensate for the botched Yahoo deal.  Assuming this is true (Microsoft has picked up MobiComp and DATAllegro since then), the CEO's company is just sitting on a large pile of cash.  It's also in touch with a large number of investors who watched its stock sink during the negotiations.

 Steve Ballmer

Apply some of the one thing to the other, and according to UBS analyst Heather Bellini, Microsoft "is about to make it up to shareholders with a buyback of as much as $20 billion."

Dina Bass notes that Bellini was "ranked the best software analyst by Institutional Investor magazine in 2007," and "[s]he expects Microsoft to complete the repurchase -- at least five times larger than its average per quarter in the last fiscal year -- over the next three months."  So this seems like a better-than-average bet.

Investors have also lent their support to the idea, driving Microsoft's stock up late last week.  Yahoo, meanwhile, sits with its stock about $1.25 above its 52-week low.