So Microsoft offers to buy Yahoo for $44.6bn in cash and shares.
Let's forget the fact that the offer is 62% above Thursday's closing price and the fact that Yahoo cut its revenue forecasts earlier this week and said it would have to spend an additional $300m this year trying to revive the company.
I really do not see how this deal will work. If it goes through (and that is a big if), I cannot quite work out how the two business models map. One could be cynical and say the move is motivated by Microsoft's desire to confront Google 'head to head' in the online search and advertising space. I am not convinced this is the best vehicle to do that.
The word on the Street is that whilst competition watchdogs might analyse the bid, they will probably not prevent it, given Google's dominance in this space.
I blogged a couple of weeks ago about Microsoft's proposed acquisition of enterprise search engine FAST. I understand those synergies well. That was a smart move by Microsoft.
Not so today's announcement regarding Yahoo. At this point, I do not really get it. It's a lot of money for a company who has struggled in recent years to compete with Google. It will be interesting to watch how this one pans out.
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