So Why Didn't Microsoft Buy Yahoo and Kill Off Google?

At the beginning of May 2007, there were strong speculations pointing to a possible marriage between Microsoft and Yahoo in an effort to counterbalance Google. The rumors were generated by merger negotiations between the two companies over a price tag of $50 billion. Such a move would have proven a gambit only in terms of integrating Yahoo into Microsoft. Subsequently, the Redmond company would have accounted for the largest volume of eyeballs on the Internet, and an online advertising infrastructure and business equivalent to that of Google. Yusuf Mehdi, Microsoft senior vice president and chief advertising strategist put an end to merger speculations following the announcement of the proposed acquisition of aQuantive, revealing that the company's advertising portfolio no longer required what yahoo had to offer.

Well, in New York on August 20, 2007, Steve Ballmer, CEO, Microsoft Corporation, answered the question of why the Redmond company did not buy Yahoo. "Yahoo! is an independent company. It's got a vision, it's got kind of a direction that it's going, and it's a fine independent company. A very expensive acquisition for anybody to do, whether it was Microsoft or somebody else," Ballmer commented, but then again, Microsoft is known to throw money at every issue, as a viable business strategy, and of course that the company would have no problems paying for Yahoo. "We can. We have an independent view. We're making progress on our independent view of the world. I hope they think they're headed down a very good path."

A potential Yahoo - Microsoft merger is - according to Ballmer - no longer a subject. But it would have helped the Redmond company go against Google on equal terms. Without Yahoo, Microsoft will have to do it all on its own. But apparently, Ballmer is up for the challenge. "I speak from the standpoint of somebody who's fairly purely a competitor. Hey, Google has done some things very well in the area of search and advertising, and believe me, we're pushing, pushing, building a little market share, really pushing into that area. Google has got ambitions in areas that overlap with us. Google has ambitions in a lot of areas, and so does Microsoft, frankly, and we're going to see them in more places," Microsoft's CEO added.