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Yahoo's Day of Reckoning

Exactly one week after Microsoft's proposed $45 billion acquisition, Yahoo's board is now ready to make a decision, sources say. A board meeting held later today will decide the future of the company. Yahoo's choices are either to become a Microsoft unit or outsource its search advertising to Google in a bid to remain independent.

The board is leaning towards accepting the Microsoft deal, although there is a group of senior execs "willing to do literally anything" to stop a Microsoft takeover, who are said to support a Google partnership. While the latter scenario would reap immediate benefits (to the tune of a 25 percent revenue increase), the long-term ramifications could be nightmarish. Worse, regulatory officials could reject a Google deal altogether, while Yahoo search employees head for more stable working environments.

In the end, the Microsoft deal is a far better option, although Yahoo will likely try to use Google's offer as leverage to gain a better acquisition price. As reported previously, there are several messy aspects to a Microsoft deal, too, but at least one thing has been made clear: "Yahoo, the brand, will live," Microsoft CEO Steve Ballmer told Business Week (link: http://www.businessweek.com/magazine/content/08_07/b4071000908736_page_2.htm). Which indicates the likely dissolution of MSN.

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