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Not far behind
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Microsoft taking over Yahoo might pose a big challenge to Google
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The news that Microsoft might be mulling a takeover of Yahoo is a shock to many, but it smacks of the inevitable. While Yahoo might be putting up a fight in Web 2.0 services with Google, the giant from Seattle has not even been allowed a footprint in
the Internet’s most lucrative emerging arena.
Microsoft is rumoured to be readying to table a $ 50 billion bid for Yahoo, in a deal that would easily be the biggest ever. Analysts watching the developments are fiercely divided on the outcome of the bid, but unanimously agree that the future will see increasing cooperation between the two.
Yahoo has disappointed in terms of performance in recent times with profits falling by over 11 per cent and it has not helped that Google is forever in innovate, make profit and acquire mode.
Microsoft is still coming out of the development and launch of Windows Vista. It has not even made a serious attempt at Web 2.0 and has not been helped by the fact that Windows Vista did not manage to generate the same kind of enthusiasm in consumers as earlier versions of the product.
Google’s takeover of DoubleClick, an online advertising firm, recently came as a blow to both the companies. Yahoo started work on a new software for its advertising and put it on stream, while Microsoft is still wondering about its strategy. Cooperation started recently between Microsoft and Yahoo, when they decided to make their instant messaging software inter-operable.
Both the companies lost a significant number of users when Google decided to make chat available through its email interface.
Analysts say the takeover could be beneficial for both the companies, as they desperately need a new impetus. Microsoft for starters has never enjoyed great appeal among web users and could find itself with a brand that already has a good user base. While for Yahoo the cash pool of Microsoft and some new thought might be welcome. The biggest hurdle for the takeover could be a rash of anti-trust issues that might crop up from Yahoo services getting integrated with Microsoft products. It is more important that the takeover goes through for Microsoft because it is in danger of never making ground to Google.
ANAND SANKAR
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