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Microsoft Should Buy Yahoo, Says Merrill Lynch


Scarecrow Man
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Microsoft should acquire Yahoo! in order to fend off Google and solidify the software giant's Internet presence, according to a Friday report by Merrill Lynch.

“The possible acquisition of Yahoo would be a strategic positive in our view,” said Justin Post, a Merrill Lynch analyst and author of the report.

Post said that Microsoft’s goal is to make advertising a significant new revenue stream, possibly even larger than the core operating system business, and buying Yahoo! would be a large step in that direction..

“A Yahoo/MSN-Microsoft combination would have garnered approximately 41% share in the US of search queries [in April] versus Google (nasdaq: GOOG - news - people ) with 44%,” Post said.

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