Looks like The Inquirer was wrong this time when it had reason to believe Google was well positioned to buy out Valve Software.  A report earlier today from the Austin Game Developers Conference 2008 event stated the search engine giant was looking to tap into the developer behind the Half-Life franchise, with the hope of leveraging their Steam digital distribution platform for potential projects.  The article did not suggest these projects had to be related to gaming, though the maturity of Steam made it an attractive base for Google's own content distribution plans.

Valve has since stepped forward to deny all of this, explaining that the news article was a "complete fabrication".  I guess that settles that for the time being.  Google itself remained mum on the subject, only saying the report was "rumour and speculation".  Admittedly Valve's Gabe Newell last month mused how his company is approached by potential investors and buyers on a weekly basis, though we won't know whether or not Google happened to be one of them.