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Posted
1 February 2008 @ 10am

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Microsoft is in like with Yahoo

I am still trying to make sense out of Microsoft’s unsolicited offer to buy Yahoo. The fact that Techmeme is overrun with stories about this (looks almost like the iPhone announcement) doesn’t help in getting a clear picture either.

Judging from Yahoo’s own press release, it looks like they are seriously considering this offer:

The Company said that its Board of Directors will evaluate this proposal carefully and promptly in the context of Yahoo!’s strategic plans and pursue the best course of action to maximize long-term value for shareholders.

When the rumors about this first floated around a few months ago, it didn’t seem to make much sense to me. After all, Yahoo has little to offer that Microsoft doesn’t already have.

But I guess it makes sense if you consider that Yahoo has a stronger users base for almost every single of those services than Microsoft does. Also, the combined company would at least be able to somewhat compete with Google in the online advertising space:

As Imran Khan, analyst at J.P. Morgan Securities wrote in his note on the deal this morning, “A combination of Yahoo’s relationships and Microsoft’s applications and devices could create a very well-positioned competitor” for Google.

Even though the Web 2.0 punditsphere doesn’t think much of Yahoo these days, they are still one of the biggest online companies around (Google is really in a class of its own). Some people say this is like the one-eyed leading the blind, and that might be true. But both of them together are leading a heck of a lot of users behind them. Let’s hope they find their way.

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