_44397651_microhoo_203b.jpgWe have all heard that “The enemy of your enemy is your friend”. Well the biggest example we can see right now is of Microsoft and Yahoo seeming to develop a friendly relationship with each other to compete against Google. In a conference call, Microsoft’s Kevin Johnson said that the combination of the two companies would create an entity that could better compete with Google.

Google secure the top position in the world to search engine and this has been hurting both Microsoft and Yahoo very much since a long time. The only way they could come up with now is combining both their powers against Google. And the hot news is that Microsoft wants to purchase Yahoo. Microsoft has offered to buy the search engine company Yahoo for $44.6bn (£22.4bn) in cash and shares and the offer, contained in a letter to Yahoo’s board, is 62% above Yahoo’s closing share price on Thursday. Yahoo has been struggling lately and it forecasted earlier that it would need to spend an additional $300m this year to revive the company. So, it seems a decent deal for Yahoo too but ultimately the proposal has to be evaluated carefully and the decision has to be to maximize long-term value for shareholders.

And again if Yahoo accepted the offer, competition authorities both in the US and the European Union would be likely to investigate the tie-ups.