According to MarketWatch, an entertainment analyst at Jefferies & Co., Robert Routh, thinks that Viacom may actually merge with Yahoo!.

Why? Well, Yahoo! CEO Terry Semel used to run Warner Bros. and could operate the Paramount division of Viacom. And, of course, he could also take all that cable content and run it through Yahoo!'s multimedia distribution network. Sort of a Google Video on steroids.

Perhaps stock analysts have given up on just doing the old "buy", "hold", and "sell." But Mr. Routh's theory collides with the theory in this week's Sunday New York Times (www.nytimes.com). The trial ballon floated in that article was that Parsons & Co. would turn to Yahoo! as the logical merger partner for AOL, especially now that Yahoo!'s stock has been savaged. As content portals, AOL and Yahoo! are probably more closely related to one another than either is to Google, a more search driven business.

If Viacom is in play, and we only have that on the flimsiest hearsay, then Time Warner may have an issue. It would be difficult to justify to shareholders that Viacom did a deal with Yahoo! and AOL was left out. A stronger Yahoo! would be more likely to stand at the head of the portal class with Google and MSN. AOL could be left in fourth place and without the resources of the other three.

Jefferies did do a good job of getting its name in the paper today. There may be nothing to it, but let's hope that someone has Mr. Semel's number on speed dial.