The Times of London says Microsoft (NASDAQ: MSFT) is on the brink of taking control of Yahoo!'s (NASDAQ: YHOO) search business. AllThings Digital says the story is hogwash.

According to the UK paper, "Microsoft is in talks to acquire Yahoo's online search business for $20 billion (£13 billion)." In the transaction, former AOL CEO Jonathan Miller and former Fox executive Ross Levinsohn would end up managing Yahoo! and owning a big piece of the business. The account says that the boards of both companies have met on the deal.

Contrast that to the U.S. technology website's take. "A report in the Times of London in which Microsoft would buy Yahoo's search business in a convoluted $20 billion deal that would include well-known Internet execs Jon Miller and Ross Levinsohn, is -- in the words of one key player -- 'total fiction.'"

The news, or lack of news, points to the role rumor has come to play in important M&A negotiations. How could a major newspaper be so wrong? How could a website, considered an expert in news about the internet, contradict reporting that was obviously based on the Times interviewing people at the center of the deal?

One of two significant industry sources is almost certainly completely wrong. Why on earth would that medium run a story that clearly has no foundation?

When rumors rule, "news" is worthless.

Douglas A. McIntyre is an editor at 247wallst.com.

Ross Levinsohn did something remarkable: that is, made a traditional media company relevant in the midst of the dot-com revolution.

As head of News Corporation (NYSE:NWS)'s Fox Interactive Media division, he was responsible for the purchase of MySpace.

The deal was truck a year-and-a-half ago (although, that is a long time in Internet years). And the price tag was dirt cheap -- $580 million (although, at the time, analysts thought it was too expensive).

Of course, it turned out to be one of the savviest deals in M&A lore. In fact, some say MySpace is worth in excess of $5 billion.

So, what next for Levinsohn? He hasn't said anything yet.

But, of course, he has a golden resume -- and could work anywhere. Or, I'm sure he could raise a ton of money and start his own gig.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.