In a research note, Merrill Lynch analyst Justin Post suggested that Microsoft should acquire Yahoo in order for both companies to better compete with Google. Acquiring Yahoo would take a great deal
of pressure off Microsoft to lift its perennially flagging portal MSN.
Microsoft's soft ad sales of 5% year-over-year pales in comparison to the Internet sector overall, which was 26%. That
said, the software giant has just poured a ton of money into AdCenter, its nice new ad system. Now it needs some compelling content to sell, which is where Yahoo comes in.
Post claims that
Yahoo is poised for some strong ad growth. Project Panama, a new search advertising system, is now live. Yahoo still has the Web's largest user base, and No. 2 positions in video streams and search
queries.
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