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BizReport : Internet : May 04, 2007

Microsoft resumes its pursuit of Yahoo

Reports are surfacing concerning Microsoft and the resumption of its pursuit of Yahoo Inc.

by Helen Leggatt

The New York Post and Wall Street Journal are both reporting that Microsoft has again turned its attention to a merger with Yahoo Inc., despite being turned down a few months ago.

If Microsoft is to catch up to Google, it’s going to need to acquire a Yahoo or equivalent. With recent setbacks it could be that Microsoft has no choice but to have to turn to acquisitions to help them compete.

"The minute you hear Microsoft start arguing against something on antitrust grounds, you know they are desperate and need to do something big," said an un-named source in The Post.

Microsoft and Yahoo properties, combined, would account for around 27 percent of the online advertising market, still a way off Google’s 65 percent share, but would go some way to narrowing the gap in online ads to around 13 percent.

"It's all about the battle for the advertisement market. Who will be the dominant force on the Internet,'" said Wim Zwanenburg of Bank Degroof Group, via "Microsoft won't be able to catch up with Google on its own. If you want to play a role, you'll have to gain market share and conquer a position."

Tags: acquisition, Google, Microsoft, Yahoo

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