Microsoft is in talks with Yahoo to have some kind of merger. This would make no. 1 Yahoo and no. 3 MSN more competitive to the challenge posed by Google
I don’t think its going to happen anytime soon, because the price tag for Yahoo would be more than $45 billion. It would make one the most expensive acquisition in history.
It would not work if Microsoft partially invest in the company(like 20% stake). Since the web is the future, Microsoft has to go all the way or not at all. Microsoft would not be able to keep one leg in MSN and another leg in Yahoo. Two brands would just compete with each other.
Now Microsoft doesn’t have any choice. Microsoft has to take the leadership on the web or cease to exist, in a sector where its not been successful. Make no mistake, Google OS is on its way. If its successful, it would kill the cash cow Windows and Office. $45 billion acquisition in that light for $242 billion company is not that big price to pay for the survival of Microsoft.
I would not hold my breath on the acquisition. I just can not see Jerry Yang selling (I know he does not own the company, but he does wield a lot of influence) Yahoo to Microsoft. It is just to hard to swallow.