Well after months of speculation it was finally announced today that Microsoft intends to buy Yahoo for a mere $44.6 billion dollars. The Microsoft press release can be found
I have been wondering why Microsoft would spend so much money on failed Google competitor but the press release explains it perfectly. It's basically for the R&D. The Yahoo user group is still enormous and adding the quality of some of their applications to the Live suite will produce a very compelling reason for people to move from Google to Live. Yahoo Mail and Messenger UI's replacing Hotmail and Live Messenger should be the first move. As outlined in the statement this will produce a second major competitor in this market.
The deal has to pass the EU before it can happen and many people are questioning if that will happen and of course it will pass without a problem. The reason I say that is because the EU claims to be working for the consumer and trying to control the monopolies. As Google is virtually the monopoly in this area the creation of a viable competitor to them should not be an issue. Come on EU prove you work for us not just against them.
Goodbye Yahoo, it's been nice browsing you.