Monday, May 12, 2008

Microsoft Bids Big for Yahoo

How much is Yahoo worth? Microsoft is offering to purchase the company for $44.6 billion in an attempt to keep its Internet strategy from falling apart under the weight of a Google-controlled search market.

Data released by Nielsen/Netratings in December shows that Google controls 56.3 percent of the U.S. search market, with Yahoo eating Google’s dust at 17.7 percent. Microsoft takes third at 13.8 percent, suggesting that a Microsoft-Yahoo combination would still trail far behind Google in terms of market share. Even so, Google is bracing for an economic impact from the proposed merger. The Mountain View, CA-based company fired the first volley shortly after Microsoft CEO Steve Ballmer’s proposal became public at the end of January. On the official Google Blog, Senior Vice President David Drummond questioned the merits of the proposed deal, suggesting that Microsoft might very well try to monopolize its way to online success.

“Could a combination of the two take advantage of a PC software monopoly to unfairly limit the ability of consumers to freely access competitors’ email, IM, and web-based services? Policymakers around the world need to ask these questions—and consumers deserve satisfying answers,” Drummond said.

The final word might not even be Google’s, Yahoo’s, or Microsoft’s: U.S. lawmakers intend to examine the proposed acquisition, echoing an antitrust scenario that Microsoft is all-too-familiar with by now. Expect this proposal to come under fire for quite some time.

*.* Source of Information : April 2008 Maximum PC Magazine

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