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Microsoft Swoops In on Yahoo

The software king, with its $44.6 billion bid for the portal, wants to catch Google in the ballooning online ad market

Concluding that neither company can successfully take on Google by itself, Microsoft (MSFT) launched an unwelcome takeover bid for Yahoo (YHOO). Microsoft said Feb. 1 it will pay $44.6 billion, or $31 a share, for Yahoo. The offer represents a 62% premium over Yahoo's closing share price Jan. 31.

The deal would marry the world's largest software maker with the owner of the most used Internet portal, helping the resulting company better grapple with Google (GOOG) in a market for online advertising that's expected to balloon to $80 billion by 2010.