I think that the rumour's source is totally unreliable, but it's credible to believe that Linden Lab has received proposals for acquisition.
With the economic downturn, it's not unlikely that companies start rethinking their acquisition strategy: instead of buying "ideas" with lots of media splash and high number of users, but no valid business model except burning venture capital (like, for example, Facebook... still not profitable after almost a decade but incredibly hyped on the media because of the half-a-billion free accounts that have registered), they might start to focus on profitable companies that have turned out a valid business model that gives them a regular income and nice profits every year.
Linden Lab exhausted their venture capital funding in 2003, and since 2005 at least, they're a profitable company. Every year they have profits enough to pay 4-5 times what has been invested in them. The virtual economy of Second Life is worth US$ 0.6 billion and grows every year far above the poor "real" economy. As a company and as a product, Linden Lab/Second Life is certainly "interesting" for a potential buyer who is not after big media splash but a solid business model that pours out money to its investors.
So the rumour might be true — specially the more wider rumour that Linden Lab is accepting to enter into negotiations wtith any company interested to acquire them; Microsoft would just be one of them — but we won't know for sure. If it's true, both companies will be under a NDA until due diligence is completed, and only after that each company might announce anything. Until then, there will be utter media silence — from both sides.
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