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SAN JOSE, CA – Now Microsoft may finally own Yahoo!. Microsoft is offering a staggering amount to internet giant Yahoo! on Friday in a bid to take over.

REDMOND, Wash. — Microsoft (MSFT) Friday made an unsolicited takeover offer of $44.6 billion for Internet portal Yahoo (YHOO) in a bold bid to leapfrog Google (GOOG) as the dominant player in the fast emerging Internet advertising market.

Source: USA Today

And guess what? Something like ‘Yahoosoft’ may emerge.

(Yahoo! Ad at Times Square, New York. /Photo: Samaw.com)

However, experts predict that it may last several months and even years before talks are done as corporate mergers are murkier and complicated than it looks. Meanwhile, experts also predict that while the two giants are talking Google might have gone even ahead of them.

What will they gain?
By joining forces, the companies would reach 86% of U.S. Internet users and control 59% of the online display ad market, according to Nielsen Online.

Will Google be threatened?
Google remains solidly entrenched as the leader in the current sweet spot, online searches and search advertising, commanding a 78% market share, worth $11.5 billion a year, says Jeffrey Lindsay, analyst at Sanford C. Bernstein. Yahoo, by comparison, has an 11% share, worth $1.6 billion.

Why Yahoo is finally going this way?The stress has been reflected in Yahoo’s slackening display-advertising revenue and its declining share of the online search market. The slumping company reported a steep drop in fourth-quarter profits, plunging its stock to a four-year low, and announced 1,000 layoffs last week. Management also conceded its turnaround efforts would take at least a year.

Yahoo Stock market fall aftermath of the breach of Privacy policy was a bad sign for any company.

And of course, a bad reputation from its co-founder Jerry Yang. I must mention that I have the highest respect for Jerry though. He is a role model for Asians whose success in the West is an inspiration for young Asian-Americans.

What weng wrong with Jerry?
Yang and Yahoo general counsel Michael Callahan were chided before US Congress for the company’s role in the imprisonment of at least two dissidents in China.

A Chinese journalist was jailed after Yahoo China, then a unit of the company, handed information about the journalist to Chinese authorities in 2004.

Conclusion:
Personally, I would like Yahoo! to remain a separate entity that gives more choices and competition in the market. But Yahoo! doesn’t seem to be competitive enough anymore. What we are seeing is nothing but bigger ones eating away smaller ones and a monopoly of an  internet giant on the market.