graeme_p - 6:03 am on May 4, 2006 (gmt 0)

Firstly the article says, major portion. This does not necessarily mean a buying the whole company - it could mean a deal like Google has done with AOL. However lets assume that they do mean a takeover.

I would be really surprised if a takeover was allowed. Competition regulators are very wary of allowing mergers between major players - and this would have to get past regulators in the US and Europe and possibly other major economics was well.

It would also be very risky. Most takeovers lose money. Combining two businesses is very difficult. In addition MS is (as with Hotmail) going to feel obliged to move Yahoo to Windows/MS SQL Server/IIS. Given how difficult it was for them to move Hotmail (at least two failed attempts), imagine how difficult moving Yahoo is going to be.

Like a lot of takeovers this is likely to be bad for both consumers and the acquirer. It will also probably damage Google, but that does not mean that there will be a winner - often takeovers just lead to a lot of waste and mess.