Microsoft wants to buy Yahoo

Microsoft is proposing to buy Yahoo and has sent a letter to its board of Directors.

Could this combination compete more effectively with Google? Would the Yahoo culture accept such an acquisition? Maybe a minor point in the grand scheme of things, but Yahoo is built on PHP and employs PHP’s inventor, Rasmus Lerdorf.

The combination will create a more efficient company with synergies in four areas: scale economics driven by audience critical mass and increased value for advertisers; combined engineering talent to accelerate innovation; operational efficiencies through elimination of redundant cost; and the ability to innovate in emerging user experiences such as video and mobile. Microsoft believes these four areas will generate at least $1 billion in annual synergy for the combined entity.

Listening to the conference call right now.

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