Will MS Buy Yahoo?

According to analysts at Merrill Lynch:

Google’s continued gains in search market traffic, combined with the company’s recent focus on software, increase the likelihood that Microsoft will buy Yahoo or eBay…an acquisition could instantly vault Microsoft to the leading revenue position on the Internet

I think it’s hard to imagine how Yahoo! share holders would go for this. Would the combined strengths of both companies make a whole greater than the sum of its’ parts, or merely create an unseemly mess? What price would MS have to pay to take over something this big?

Meanwhile, Google continues to gain market share:

Google’s share inched up 1 percent from April to 44.1 percent, ComScore Networks said. Second-place Yahoo and third-place Microsoft MSN, meanwhile, saw their shares remain relatively unchanged month-to-month at 27.9 percent and 12.9 percent respectively”

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