An update on the report from the UK’s Financial Times and The Telegraph that Microsoft is all set to buy Yahoo’s search engine division for $20 billion: more media outlets are carrying the story on Sunday night, including Drudge and CNET.

But CNBC found an inside source who claims the deal is not complete and may not happen, at least until a new Yahoo CEO is in place. That is said to be a personal objective of Microsoft CEO Steve Ballmer, CNBC reports.

This story should be breaking mainstream by Monday morning on the East Coast and I’ll keep an eye on it for you.

Until then, let’s turn our gaze over to the holiday shopping season, where scores of tech industry CEO’s have their stockings all hung on chimneys with care, in hopes that a profitable Black Friday soon will be there.

Well, they got their wish – sort of. Retail analyst Comscore reports that U.S. online spending numbers were actually up for BF 2009; to $534 million from $531 million in 2007.

Web consumer site also issued a somewhat cherry report, citing an 11% spike on Internet shoppers on BF 2008. Looking forward, Comscore estimates that online sales for the holiday season will clock in at $29.2 billion – about the same number as last year.

More numbers from the National Retail Federation look even rosier for companies looking to sell goods online this Christmas. According to the NRF, 172 million users browsed the Internet looking for good deals this past weekend, up from 147 million in 2007. The NRF also expects that online holiday sales to rise to $470 billion this year, up 2.2% from last year.

Why all the good news? Three words: bargains, bargains, bargains, especially in the consumer electronics sector. "Pent-up demand on electronics and clothing, plus unparalleled bargains on this season's hottest items helped drive shopping all weekend," NRF CEO Tracy Mullin says in a company statement. "Holiday sales are not expected to continue at this brisk pace, but it is encouraging that Americans seem excited to go shopping again."

By far the most popular item on the holiday docket is Nintendo’s Wii video game console. Over the weekend, buyers grabbed 3,171 Wii's on eBay alone, says They also snatched over a 1,000 Wii Fit units.

The Wii had some company. According to PriceGrabber, the following were at the top of the wish list for holiday shoppers online over the holiday weekend:

• Nintendo Wii console 

• Sony BDP-S350 1080p
• Blu-ray disc player 

• Samsung LN52A650 52" LCD TV 

• Nintendo Wii Fit 

• Panasonic TH-42PX80U 42" plasma TV 

• Sennheiser HD 555 headphones 

• Canon EOS Rebel XSi Black SLR digital camera kit 

• Acer Aspire One AOA110-1295 notebook PC 

• Canon PowerShot A590 IS black digital camera

What does that list tell traders on Monday? That the stocks of companies like Sony, Nintendo, and Samsung, to name a few, might gain the exalted “recession-proof” stamp of approval from investors.

Certainly that’s seems to be the case for the big video game makers, whose stocks have remained relatively stable as adult consumers put their own wants and needs aside so they can afford to buy Wii’s, Playstations and Xboxes for their kids this holiday season. Throw in a few hundred thousands Apple iPod Touches, to boot.

It’s a noble sentiment for the holiday season that probably has a ring of truth to it. So for a good sector play in December, think video games. Because that’s what parents are thinking.