Microsoft offers $44.6B for Yahoo

Perhaps this time government regulators ought to consider just saying no.

Unlikely, perhaps - at least here in U.S.A., Inc. - but it's difficult to understand what the concept of antitrust means anymore if the world's most powerful technology company is allowed to buy its No. 1 competitor's No. 1 competitor.

Minutes ago Microsoft announced a $44.6 billion offer to put Yahoo out of its misery.

(Update: Yahoo mulling offer. Stock up 44% at 11:15 a.m.)

While Yahoo stockholders will likely be popping champagne corks this morning, the rest of us ought to be taking a considerably more sober approach to the deal and its implications.

On the one hand, it could be argued that Yahoo would be nothing but a $44.6 billion anchor that Microsoft would regret having taken on before all the paperwork is completed. Let Redmond choke on it, you might say.

On the other, this just can't be good for competition, consumers or the Internet - no matter the obligatory this-is-for-our-own-good spin being put on the deal by Microsoft.

From the press release:

"We have great respect for Yahoo!, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market," said Steve Ballmer, chief executive officer of Microsoft. "We believe our combination will deliver superior value to our respective shareholders and better choice and innovation to our customers and industry partners."

Let the shareholders decide that question for themselves. I'd be skeptical if I owned Microsoft stock. As for customers and industry partners, there's little good to see flowing their way from this deal.

"Our lives, our businesses, and even our society have been progressively transformed by the Web, and Yahoo! has played a pioneering role by building compelling, high-scale services and infrastructure," said Ray Ozzie, chief software architect at Microsoft. "The combination of these two great teams would enable us to jointly deliver a broad range of new experiences to our customers that neither of us would have achieved on our own."

Say it ain't so, Ray. One has a difficult time imagining the Ray Ozzie of Lotus Notes - Rock Star Ray - expressing nothing but sunshine over the prospect of Microsoft breathing all the air.

Washington will roll over, of course, because Washington always does.

Europe will be another matter, though.

In the end, Microsoft will get what Microsoft wants. Yahoo!

(Update 2: Reaction and analysis pouring in ... from Forbes, taking stock of Yahoo ... from New York Times blogger Saul Hansell, who sees a done deal .... Seattle P-I blogger Todd Bishop, on what might become of the Yahoo brand ... Henry Blodget on Microsoft's "brilliance" ... and The Economist on Google implications.)

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