Internet merger to take on Google February 1st, 2008

Microsoft has sent a letter to the Board of Yahoo with a request to buy the search engine company in a deal that would be worth over £22bn.

Yahoo and MSN have been struggling to compete with Google, who continues to dominate the search engine market and consequently gets the lions share of of associated advertising revenue. Steve Ballmer, the chief executive at Microsoft believes the combined entity would offer serious competition to Google and also benefit consumers, publishers and advertisers.

Yahoo has yet to respond but the market views the deal favourably and shares in Yahoo rose 54% on the news.