Could Microsoft finance a Yahoo buyout involving Silicon Valley executives and investment banks? That's the concept being floated by TechCrunch in the latest chapter of the saga. The complex financial deal would be financed by Microsoft debt to the tune of about $20 billion, TechCrunch reports, citing sources with knowledge of the proposed transaction. To be clear, it doesn't appear as if Microsoft is involved in the talks at this point, with TechCrunch reporting that the deal "absolutely hinges on their involvement." Pipe dream or reality?

Despite the troubles in the economy, The New York Observer finds that Microsoft co-founder Paul Allen continues to spend $384,000 a week maintaining his 414-foot yacht The Octopus. Meanwhile, since we are speaking of $200 million yachts, The New York Social Diary clears the record for incorrectly reporting that Allen's big boat dumped garbage at sea while in Capri a few years ago.

Seattle venture capitalist Jon Staenberg tells PeHub.com that he is no longer full time at Rustic Canyon and is now working on three new startups, including an Argentinian vineyard and two companies in the business social media arena. Most of the Q&A is spent with Staenberg discussing why he merged Staenberg Venture Partners with Rustic Canyon in 2003, but we are curious where the former Microsoft marketing manager is heading next.

Sandlot Games of Bothell is partnering with Hamburg, Germany casual game distributor Intenium, with Sandlot's Cake Mania and other game distributed in the German language on the site Deutschland-Spielt and other portals.

Agoura Hills, Calif.-based DTS is paying $7.5 million in cash to buy Kirkland-based Neural Audio, a 9-year-old maker of audio technologies used in digital television, radio, consumer electronics and games.  If certain milestones are met, DTS could shell out an additional $7.5 million over the next five years as part of the agreement. Neural Audio's Geir Skaaden, Mark Seigle, Jeff Thompson and James “JJ” Johnston -- a pioneer in audio coding formats -- are expected to join DTS.

Seattle online real estate upstart Redfin compiles a long list of numbers and achievements for 2008, saying that earnings were above plan by 17 percent, transactions increased by 23 percent and revenues increased by 41 percent.

BuddyTV co-founder Andy Liu has started a new blog, Inspired Startup, where he talks about his love/hate relationship with Sprint; the role of advisory boards at startups; and how to negotiate with a landlord for office space. Good to see some new bloggers in the Seattle startup community. Welcome, Andy!

Microsoft will not lease the 2201 Westlake property in South Lake Union, a move that company spokesman Lou Gellos tells the P-I is tied to the "economic situation and the changing market conditions." The company, which had been in negotiations for the 300,000 square foot property owned by Vulcan, still holds leases at the Westlake/Terry building in the neighborhood as well as properties in Pioneer Square and near Qwest Field. More from Jeanne Lang Jones of the PSBJ, who quotes a Microsoft spokesman who says the company is not interested in the WaMu buildings in downtown Seattle "at this juncture."

Shares of F5 Networks gained four percent today even though the Seattle maker of Internet traffic management products lowered first quarter revenue guidance to $165 million.

Following Tuesday's launch of Clearwire's WiMax service in Portland, Intel has written down its investment in the Kirkland wireless broadband provider by 60 percent, reports The Oregonian. Intel, a major investor in Clearwire, is taking a non-cash charge of $950 million on the investment. Ouch!

The Nasdaq stock exchange and pharma giant Eli Lilly are talking up their use of Amazon.com's cloud computing services at upcoming events (see here and here). One of the key questions for Amazon Web Services is whether it can attract large enterprise customers, growing the business beyond the early adopter group of tech startups.