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Sources tell Valleywag that lifecasting startup Ustream.tv is in advanced discussions with Microsoft to acquire the lifecasting service for more than $50 million, but there are other companies in the bidding as well. Ustream is currently raising a very large initial round of VC financing, and Microsoft is attempting to grab them prefunding for a cheap price. Our tipster also mentions that Microsoft would use Ustream as a way to promote its Adobe Flash competitor, Silverlight. Ustream has raised around $2 million from angel investors, and seems to have hit the market at just the right time.

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The disastrous beta launch of Yahoo Live puts the spotlight on firms like Ustream.tv and Justin.tv. There are more than a few companies that could easily integrate a streaming video service into their content strategy, including Microsoft, Apple, YouTube, or any number of camera and PC manufacturers.

Ustream focuses more on broadcasts of events, rather than lifecasts — those intensely boring 24/7 video streams of people's lives. Ustream has streamed several major concerts, including some from Hannah Montana, and has been used by a number of presidential candidates, including Barack Obama and Hillary Clinton, to broadcast exclusive events. The Republican National Convention will be on Ustream this summer. This focus on "eventcasting" could make it more respectable than a lifecasting startup — and more tempting to a major buyer like Microsoft.