Google (GOOG) shares have been on a strait upward trajectory since it's earnings annoucment a couple weeks ago. What else could propel the stock back to the $700 range you ask? Try a failed Microsoft (MSFT) bid for Yahoo (YHOO). With Google already light years ahead of both companies combined in online search and related products, the failed combination results in a tremendously weakened competitive landscape for Google.

Yahoo executives passed on a $33 a share offer from the PC softward giant, a roughly $5 billion increase from its previous offer. The company was looking for something in the $37 range.

Following our earlier coverage of buying activity in Google this morning thorugh our premium service, early traders in the pre-market this morning are viewing the news correctly (in our view) and getting positioned ahead of the opening bell.

Google last traded at $604, well above its $581.29 close on Friday.

By the way, Yahoo is setting up for a nice pre-market short trade. Use the Event Window tool within the subscriber section to see how Yahoo has reacted to similar news in the past.