Microsoft to Takeover Yahoo!

This is a big market consolidation for search engine/portal/content companies. Wow. It could really shake up Google and drive more innovation through competition.

From the AP here via Drudge:

Microsoft Corp. has pounced on slumping Internet icon Yahoo Inc. with an unsolicited takeover offer of $44.6 billion in its boldest bid yet to challenge Google Inc.’s dominance of the lucrative online search and advertising markets.

The surprise offer of $31 per share, made late Thursday and announced Friday, seizes on Yahoo’s weakness while Microsoft tries to muscle up in a high-stakes battle with Google likely to define the technology landscape for years to come.

In a statement Friday, Yahoo said it will “carefully and promptly” study Microsoft’s bid.

With its profits steadily sliding, Yahoo’s stock slipped to a four-year low earlier this week and a new management team has been trying to steer a turnaround but sees more turbulence through 2008.

The announcement lifted Yahoo’s share price by almost 50 percent in morning trading, while Google fell almost 8 percent, dragged down by a fourth-quarter earnings report that missed Wall Street expectations.

So is Microsoft’s bid an admission of its own inferiority in the ad/portal/content space? Or are they acknowledging the superiority of many of Yahoo!’s features? Probably. I hope the Yahoo! items that I’ve come to love won’t change like their email, their homepage portal and their news feeds.

Update!  I like Yahoo!  Google is Whack.