I for one don't think they would beat Google even if they did merge, and truth be told, I would move the heck away from My Yahoo! in favor of iGoogle if this did happen. Not much good comes from services typically when they fall under the Redmond fold.
However, there has already been one positive from the rumors. That Yahoo! stock I purchased a few weeks ago on a dip is up nearly 20% today. Wow - that trade looks good in hindsight now, doesn't it! (See: Buying on the Dips Can Kill Your Finances)
Yahoo/Microsoft news from My Link Blog:
* Internet Outsider: Microsoft To Buy (Swallow) Yahoo...Again? Please, God, No.
* Jeremy Zadowny: Microsoft and Yahoo (again)... I couldn't tell you if I knew.