Yahoo and Microsoft reportedly consider Merger

[mandy]

The deal would not be a panacea for the two companies' common woe of watching rival Google race away with the Web search and advertising markets. Even if the search market shares of Microsoft's MSN and Yahoo were combined, Google would still retain a nearly two-to-one market share lead, according to recent data from Nielsen//NetRatings.

In March, Google accounted for 54 percent of Internet searches, compared to 22 percent for Yahoo and 10 percent for MSN, Nielsen//NetRatings reported recently. Also for March, Microsoft's share of global online ad revenue was only 7 percent, compared with 43 percent for Google and 23 percent for Yahoo, according to investment bank UBS.

Microsoft needs to do something big, and Yahoo needs to deliver more value to shareholders frustrated by Google's much stronger growth and profitability,...

A broad strategic alliance may make more sense than an outright acquisition, largely because the two companies have considerably different cultures that may make for a difficult and messy integration,...

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