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Microsoft To Buy Yahoo!?

written by John Chow on May 4, 2007

Traffic Masters Academy

I got up this morning to the news that Microsoft is looking at the possibility of buying Yahoo! in a deal worth an estimated $50 billion. It’s no secret that both Microsoft and Yahoo! has been feeling the power of the Google machine. Google beat out MS to supply ads for AOL in 2005 and recently won the bidding war against MS for Double Click.

A buyout of Yahoo! by Microsoft at this time actually makes some sense. Yahoo! has been performing poorly, it’s management has been shaken up and the share price has been under performing. Microsoft needs to step its game if it wants to compete against Google on the search engine front. Their new Live search is a joke (do a search for John Chow and you’ll see what I mean). With Google developing Internet-based software that directly competes with Microsoft Office, Microsoft really doesn’t have much of a choice but to go on the offensive.

Even if the deal was to go ahead, the combined MS Yahoo! search volume would still not equal Google’s, but it would go a long ways to closing the mile wide gap the currently exist. News of the take over has boosted Yahoo! stock 18% in today’s trading.

How do you feel about a potential MS Yahoo! marriage? A good idea or more a marriage of conveniences?

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