Microsoft have launched a $44 billion bid for Yahoo! offering shareholders a 62% premium on their shares.

What will this mean for Yahoo! The two have been working a lot closer together over the last year or so. On the new Live messenger you can add Yahoo! contacts and same goes for the new Yahoo IM application. Not exactly hugging but its the closest they’ve ever been.

Steve Bulmer, CEO of Microsoft says, "We have great respect for Yahoo!, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market".

Basically, joining together means they may have a chance of competing with the might of Google. MS has not really been able to dent Google’s stranglehold on search, Yahoo! does better, but if you stick the two together MS might actually be able to compete.

Also look at the social networking side of things. Live Spaces and Yahoo! 360 have not really been able to compete with the likes of MySpace and Facebook but together, you never know.

Its going to be interesting to watch and see if a deal goes through and see if some of their products get joined together.

In the future we could be checking our email using YahLook or surfing the next with Internet Exhoorer!

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