THE NEW GENERATION

Microsoft’s bid for Yahoo! shows that the software giant needs help to make a lasting mark on the internet, says David Crow

It was, by anyone’s standards, a bold and audacious move. After years of flirtation, Microsoft, the Seattle-based software giant, last week decided to force a marriage with Yahoo!, aggressively bidding $44.6bn (£22.8bn, e30.5bn) for the Californian internet pioneer. It was hard not to admire Microsoft’s timing: the double whammy of Google’s shares underperforming – closing down 6.8% at $520.5 the day before the announcement – and the terrible commercial performance of Yahoo! in recent months proved too much to resist.

The icing on the cake was the element of surprise. While a merger of the internet’s number two and three had been on the cards for two years now, rumours had all but died out in recent months, with the attention centring more on Microsoft recently acquiring a 1.6% stake in Facebook, the social networking phenomenon. Coming at a very difficult time for the global economy, the potential deal also serves to emphasise how, in times of dear credit and uncertainty, cash-rich companies such as Microsoft truly are king.

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