Unable to ruin Google Inc on its own, Microsoft Corporation is trying to force crippled rival Yahoo Inc into a shotgun marriage, with a wager worth nearly $42 billion that the two companies together will have a better chance of tackling the Internet search leader.
Microsoft’s courageous attempt to buy Yahoo, spelled out in an unsought offer announced on Friday, shows just how much Google threatens the world’s largest software maker’s grip on how people interact with computers. For Yahoo, the bid represents another painful reminder of how missed opportunities & mismanagement combined to open the door for Google to displace it as the Internet’s main gateway, decimating its stock price in the process. Redmond, Washington-based Microsoft is trying to avoid a similar fate at Google’s hands as more people access services and computer programmes online instead of relying on packaged software applications. Although Microsoft remains the world’s most valuable technology company, its position will become more precarious unless it can cultivate a more loyal Internet audience and generate more online ad revenue to subsidise the free services taken for granted on the Internet.
Microsoft is acutally aware of the upheaval that can be caused by a pivotal shift in technology, having been the biggest beneficiary during the 1980s and 1990s of a transition from mainframe computers to personal computers that knocked IBM Corp off its pedestal.
AMR Research analyst Jonathan Yarmis said,”Microsoft has to do this deal. It’s a battle that Microsoft needs to win”.