"WHEN WILL YAHOO ACQUIRE TECHNORATI?"
I saw that Michael (TechCrunch) got his copy of Red Herring magazine last night too and read the article on "Hungry Hungry Yahoo" with Technorati at the top of their hit list.
At TechCrunch, he has a good post on why Yahoo! should acquire Technorati. This acquisition would follow Yahoo!'s recent acquisition trail, but I think Technorati would be more valuable to Microsoft.
Microsoft needs gain some of the spotlight and traffic from the Web 2.0 crowd. They are definitely improving their search technology and making strides with things, such as their new maps and coming Hotmail, but in terms of mindshare I believe they are a blip on the radar screen. The acquisition of Technorati would help bring new, active users to its current properties and for their future services.
I still believe Google will eventually catch up and build a better blog search engine than Technorati, Yahoo! is the candidate that fits the best with Technorati, and Microsoft is the company that benefits the most from acquiring Technorati... and they have the most cash too :)