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BizReport : Research archives : February 04, 2008

Microsoft, Yahoo deal could change the face of the web

Late last week, Microsoft shocked the online world by bidding more than $44.5 billion for Yahoo, the Internet's second-largest search engine. The news has some other Internet properties fighting back and talking about antitrust issues. Before we get to that, let's take a deeper look at what the merge could mean.

by Kristina Knight

According to metrics firm Hitwise, the combined share of Microsoft and Yahoo (for the week ending January 26) would have been 15.6%; Google, by relation, had a 7.7% share for the same week. For search alone, Google would still be the market leader. Google accounted for more than 65% of searches for January. By combining, Yahoo and Microsoft (the second and third leading search engines most months) would have accounted for more than 27% of searches during January. As you can see, some things would change if the merge were to go forward but search rankings would stay relatively the same with Google in a commanding lead.

Though some are excited about the prospect of the merge, Google is not. The company fired back at reports of the buyout offering on Sunday saying Microsoft was simply trying to deepen their software monopoly.

David Drummond, a Google senior vice president and its chief legal officer, said in a blog post that "the combination of Microsoft and Yahoo could undermine competition on the Web and called on policy makers to challenge the combination." He went on to say that with Microsoft already in a controlling position because of Internet Explorer and the Windows operating System the merge with Yahoo could limit users ability to surf the web, read email and instant message.

Tags: Google, Microsoft, Yahoo

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