No prizes for guessing which other company prompted this move:

"Today, the market is increasingly dominated by one player who is consolidating its dominance through acquisition."

"This combination [MS & Yahoo!] enables synergies related to scale economics of the advertising platform where today there is only one competitor at scale."

Can't compete with their own product, so they buy an existing one off the shelf... I'm expecting an update to IE shortly (if it goes through and Yahoo takes their money) which will set all searches to Yahoo...

If this goes through, Im outta Yahoo and anything to do with them (including emails and portal home page.). Nothings sacred with Microsoft anymore.

...for just about everything aside from Windows and Office.

1) Identify opportunity.

2) Realise someone's already come up with a neat solution.

3) Attempt to compete (and use questionable tactics if necessary).

4) Struggle to gain satisfactory foothold.

5) Buy competitor.

6) Glue it to Windows.

6) Profit (doesn't matter, it's driving Windows)?

Coming soon... MS bids for Nintendo (Wii for Windows)? Or resurrects Sega!?

Zimbra is an increasingly attractive alternative to Exchange, and just recently(ish) got purchased by Yahoo. Its future suddenly doesn't look so rosy.

Nuff said

If you cant beat them, buy them..

as long as you have a big wallet

Microsoft! deal! smacks! of! desperation!

And we're very cross because it's not us.

Holy! Anti! Competitiveness! Enquiry! Batman!

You can be sure Goooooogle will bitching about this in due course. Any chance Google might try and buy Apple now?

"A year has gone by, and the competitive situation has not improved"

Read between the lines, and it sounds like Microsoft are almost saying "we need your help [against Google] and are prepared to pay for it"

What's this? Microsoft trying to suggest that monoploies are bad and competition is good? HA! When it suits them perhaps...

$44.6bn?

Thats seriously over valuing Yahoo!

By $44.59bn

I've worked with internet technologies for 10 years at an ISP. Searching has become synonymous with Google. Everyone I know says 'Google it' instead of 'search' for something. In addition most people I know have Google as their homepage.

What can a Yahoo!/Microsoft hybrid really offer that they're not doing already?

Yahoo! is worth that much???? Bloody hell, it's always seemed like such a cheap manky, spam ridden site. Like the Lidl's of search engines. The shop you'd rather not go to in case you catch something.

Google would be Tesco online I guess.

This act seriously shows how vulnerable they feel by the domination of Google in WWW. Wonder what excuse Yahoo can come up with this time. After all Steve's made them an 'offer they can't resist' or can they ???

...not the 1st of April.

exactly how many Yahoo! Stock! Holders! actually fell of their chair when reading this.

So it's the usual MS strategy is it? So rather than bother developing a better gathering engine for MSN, lets simply buy a huge database from

someone else, that already has all the data we want.

Oh and and Yahoo execs better speak to MS building facilties to make sure they get the same contractors in to secure the furniture, especially if Mr Ballmer is making visits.

i suppose I will have to stop using yahoo now.

the only company that can hold a monopoly is Microsoft. In the online services area, we must have competition.

In the software area, not.

that's crazy money!

So Microsoft is offering a ton of cash and saying that Yahoo! sucks anyway, the old stick and carrot approach I pressume?

Who stole My coat?

Wow, MS are to become the largest users of open source software on the planet, and pay US$44.6 bn for the privilege or will they migrate to their own dogfood and bring Yahoo! up to the wonderful standard we have come to expect from Hotmail.

Icon, 'cos Bill runs BSD now

rather than innovate to compete to Google.

Sad that Yahoo is worth only $44 billion .

Yahoo own Flickr - one of the best photo sharing websites used by pro photographers and the rest of us. Acclaimed for its no-fuss minimalist ease of use of its many features. Yahoo also own del.icio.us is a versatile website bookmarking/favouriting tool, again winning on ease of use and simplicity.

I would hope that these invaluable tools are not affected by an acquisition. Microsoft may try to promote uptake of its own proprietary technologies by introducing them into these tools. And that would restrict how they can be used. Compatibility is the enemy of competition and using proprietary technology as a safeguard to profits is an outdated idea. Google have had phenomenal success without needing this approach.

the exlcaimation marks were necessary, today's the day!

What, you mean like Google?

I'm worried about the El Reg Headlines if this does go through. Will El Reg put a ! at the end of all Microsoft stories?

What % of the webmail market share would Hotmail and Yahoo mail have together? Not sure what other segment this would lead to a more or less monopoloy.

Makes some kind of strategic sense to me. No idea on the financials.

Just hope MS don't screw up Flickr and Del.icio.us.

"either cash or Microsoft stock"

Cash for me, I think. Lovely to think that Ballmer is grumpy again because someone else looks like being a monopoly...

Due to the upcoming merger of Microsoft with Yahoo! There are new plans to charge for both MSN (And Microsoft Live!) and Yahoo Instant Messangers if you forward this e-mail to 100,000,000 people Microsoft and Yahoo will track it and pay you $0.02 for each "impression" by e-mail as well as reconsider charging for the services.

"Can't compete with their own product, so they buy an existing one off the shelf"... sounds just like the Yahoo modus operandi to me. Flickr!, etc. A match made in heaven

Yahoo! Toolbars! In Xbox! Blades!!