Microsoft Offers to Buy Yahoo!

Microsoft offered approximately $44.6 billion to buy Google competitor Yahoo! according to a Microsoft press release. Yahoo! has not yet accepted or declined the offer.

Steve Ballmer, chief executive officer of Microsoft said the deal would “deliver superior value to our respective shareholders and better choice and innovation to our customers and industry partners.”

This is a smart move for Microsoft, who still is in third place for Web search. Yahoo! is in second place in Web search, and it has not been doing well financially lately with layoffs and a change of CEOs. Microsoft has deep enough pockets to bail them out of this mess.

This is also not the first time Microsoft has offered to buy the Internet company. The Microsoft press release said they'd had an offer declined last year.

It's unclear exactly how both companies would combine, since they both have a lot of competing products like search engines, email, instant messaging, and contextual advertising. That might mean the death of many products and even more layoffs for the near future. It's also unclear if this will benefit either company in the end.

Would they become the next Google with this purchase, or is it more like AOL buying Netscape?