The merger will include Yahoo! selling pay-per-click advertising on both
Microsoft and Yahoo! web sites which they hope will increase revenues as
there will no longer be competition between each other. But Yahoo! will
keep 88 percent of the revenue. The merger will add to Yahoo!’s
earnings of around $275 million extra a year plus there will be a
substantial drop in its investment in technology development.
I think that Yahoo should definitely merge with Yahoo. I think that Yahoo is a dying search engine that can no longer compete with the other search engines out there. Yahoo merging with Microsoft can only be beneficial to the company. And it would help Microsoft get a trusted search engine in the market.
While both Microsoft and Yahoo are both technology companies they have very different underlying businesses, Microsoft is more in the software and physical product side of things while Yahoo is in the online advertising and web page side of things, I think a merger would make little sense in the current environment.
It makes sense to keep Yahoo and Microsoft separate from merging, because they seem to be pretty distinct in their operations and product lines. Neither are necessarily at the top of their class or far ahead of their peers, so to join forces might increase risks and the possibilty for greater loss.
I do not believe Microsoft and Yahoo! should merge. To me, Yahoo! is old news. Windows has more staying power but I think they are declining in a lot of ways. I think they should stay clear of Yahoo! because it's not going to help them at all. Yahoo! is probably over evaluated as well.