Microsoft would be insane to buy them out now. Perhaps 3-4 years ago, they could have done so sensibly - back when the CoD brand was just taking off, WoW was massive, Guitar Hero was still popular, and Activision's share price was lower.
Right now, Activision doesn't have any standout franchises in the process of being established (indeed, they have little by way of new franchises at all, from what I can see). The closest they have is the Skylanders expanded IP, and that's nothing like the powerhouses that Activision have had.
Call of Duty is being driven pretty hard, with most people anticipating a significant drop in sales either with the next entry (Black Ops II) or the one following it. Indeed, the main talent associated with the Modern Warfare subfranchise have all left to make a new studio under EA (side note: EA are now more hated than Activision. Is it possible that Zampella and West are the cause of all the animosity - EA was most hated back when Zampella worked for 2015 inc, where they worked on Medal of Honor for WA. They then made Infinity Ward and were bought by Activision, who subsequently became the most hated. Now they're back at EA under Respawn Entertainment, and EA is most hated again).
And because of the nature of FPS, it is likely that, if CoD became first-party for MS, people who played CoD on the PS3 would move to a different franchise (probably MoH, given how similar it looks to CoD, now) rather than switch consoles.
In short, if MS are even considering it, then they need to stop, now. Especially given that Activision is strongest in America, where MS already has a comfortable lead over Sony. What MS needs to do is look East - they'd be better off trying to acquire Capcom, Square Enix, Namco Bandai, or Tecmo Koei.







