Pursuit of Yahoo Shows Microsoft Needs a Franchise

Two weeks after walking away from takeover talks with Yahoo, Microsoft made clear on Sunday that it still needed to create an Internet powerhouse that could rival Google -- and that its interest in Yahoo had not waned. Microsoft said on Sunday that it had approached Yahoo, this time with an ostensibly narrower aim: a collaboration on Internet advertising. But it hinted that it could still seek a takeover down the road. The renewed talks reflect both Microsoft’s fears and Yahoo’s potential ills. Microsoft wants to head off any collaboration on advertising between Yahoo and the market leader, Google. At the same time, Microsoft is seeking to capitalize on the perceived weakness of Yahoo, which is facing a proxy battle with the activist investor Carl C. Icahn over the failed takeover talks.
http://www.nytimes.com/2008/05/19/technology/19soft.html?ref=todayspaper
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