The Post's Microsoft (MSFT) moles report that Redmond is considering making another run at Yahoo (YHOO), this time by making its informal offer public. This rumor rolls around every few months, and one of these day's it's going to happen, especially if Yahoo's stock continues to tank.
As we've argued, the Internet industry will not support four major generalists--Google, Yahoo, AOL, and MSN--and two of them need to combine. We like the Microsoft-Yahoo combination a lot, but we think a simple Microsoft swallowing of Yahoo would be a disaster. We think Microsoft should sell its Internet business to Yahoo in exchange for a significant chunk of equity. The resulting public entity would be able to recruit top talent, more effectively compete with Google, and operate independently of the Windows/Office machine.
Microsoft, Yahoo!, Deal, Buy, Acquisition, Croporate News