Microsoft looks set to buy Yahoo!

This is no longer “new” news, but it is big news, and if it does go through, it will have huge implications on the search world. Microsoft’s bid would be one of the largest technology mergers the world has ever seen and would thus present important issues regarding the competitive landscape of the internet.

As Danny Sullivan mentions in his post on Search Engine Land on Friday, Microsoft is to bid $31 per share to Yahoo!’s board of directors to purchase the company, offering a deal that is potentially worth $45 billion.

A key congressional committee said it will scrutinise the bid on 8 February. Members of the US Congress Judiciary Committee said any sale of Yahoo! would raise important competition issues, and European regulators have said they would give the deal a fair hearing. The Committee will hear from experts who will discuss “whether this proposed consolidation works to further or undermine the fundamental principles of a competitive Internet.”

According to the BBC, There has been substantial conflict between the European Union competition authorities and Microsoft in recent years. In 2004 the European Commission fined Microsoft 497m Euros for abusing its market dominance, a ruling the US Company finally lost on appeal in September last year. Since then, the Commission has launched two new competition inquiries against Microsoft.

Competition Commissioner Neelie Kroes reckons, however, that this continuing legal dispute would not affect the takeover.
This is big for Google as they are so dominant in the internet search engine market with a massive share of the market. Yahoo! said its board was evaluating Microsoft’s approach “carefully and promptly” as both Microsoft and Yahoo! have been struggling to compete with Google.

I can`t wait to see what happens, as this is bound to be huge, and it could have even greater implications for PPC. If Yahoo! and Microsoft can engineer a combined ad network which would actually deliver targeted ads as well as Google does, a new competitor for adsense revenue could be in the making.

Sullivan mentions that it’s not clear that Yahoo! will necessarily say yes. The offer does make the company look much more valuable all of a sudden. In addition, AOL, IAC, and potentially, Google could make offers. If Google were to do so, no doubt a huge anti-trust uproar would emerge. But Microsoft, with such a smaller share of search and online advertising, is likely to escape such serious attention.

Let`s wait and watch this unravel, regardless of the outcome, as it will mark a significant occurrence in history. Who needs TV?