Assuming that Saturday's public walkaway by Microsoft doesn't prove just to be a high-risk negotiation tactic against Yahoo -- after all, the companies are rumored to have been talking about some sort of merger or acquisition for almost three years -- then what we have is a software vendor suddenly awash in tens of billions of unspent dollars that it can now lavish on other Internet firms.

But who to choose? Keeping in mind Microsoft's relative weaknesses -- search, Web advertising and Web 2.0 services -- we've come up with a short list of potential targets that would provide at least some of the same bang as buying Yahoo would have given.

Bachelor No. 1: AOL

Forget about its declining dial-up business, which Time Warner is splitting off from AOL proper in any case. AOL is the most logical acquisition for Microsoft for at least four reasons:

1. AOL's online advertising network, called Platform A, is the largest in the US -- even bigger than Yahoo's. According to comScore, Platform A had 91 per cent reach of the total US Internet audience in March in comparison with Yahoo's 85 per cent reach and third-place Google's 81 per cent reach. Microsoft, through its DRIVEpm division (previously part of aQuantive), ranks eighth, with 66 per cent reach. Time Warner itself says Platform A, formerly called Advertising.com, delivers 3 billion Web banner ads a day to AOL and other Web sites. AOL acquired Advertising.com in mid-2004 for US$435 million, a price that now looks pretty good.

2. It may seem like only your parents and grandparents actually use AOL, but its Web properties are actually the fourth most popular in the US measured by unique visitors, behind only Yahoo, Google and Microsoft, according to comScore. They are ahead of such leading lights as Fox Interactive Media's MySpace.com, eBay, Amazon.com and Facebook. Despite the overlap, a merger of Microsoft and AOL's properties would likely lead to an immediate leap to the top.

3. One of those Web properties is AOL's recently acquired Bebo. Though not popular in the US, Bebo is reportedly huge in the UK and many other countries. It's one of a number of sites -- Hi5, Friendster, Google's Orkut and others -- that are vying for third place behind MySpace.com and Facebook in the casual-social-networking space.

4.AOL Instant Messenger's (AIM) days of dominance may be long over, but according to comScore, it remains the third most popular IM network worldwide, behind Windows Live Messenger and Yahoo Messenger, and the most popular in the US. AIM also had no interoperability with either Microsoft or Yahoo's services (it chose to partner with Google instead) making a combination with Windows Live Messenger even more appealing.

Downsides: AOL's display advertising business is stagnant, with the company acknowledging during its financial conference call last week that it was wrestling with integration issues from two recent advertising-related acquisitions. And what about that Web advertising bubble that people are talking about?

Potential price: AOL's revenue makes up about a tenth of Time Warner's overall revenue. With AOL's access business declining and even its Web advertising revenue slipping slightly, it's hard to argue that AOL is exhibiting any more growth potential than Yahoo. A US$10 billion offer would value AOL at a 79 per cent premium over one-tenth of Time Warner's US$56 billion market cap at Friday's close. That's higher than the 72 per cent premium Microsoft's final US$33-per-share offer would have paid over Yahoo's then-dipping stock price. In other words, more than fair.