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What Will Micro-hoo Look Like?

The Micro-hoo camp has been eerily quiet over the last few days, leading BoomTown's Kara Swisher to believe that a deal is getting closer. Ever since Yahoo released its "sunny-side-up growth plans," Microsoft has gone virtually silent. Most figure that the software giant will up its initial bid of $31 per share to something approaching $35. The official word from Redmond: "We are being patient and open to listening."

With a deal approaching, Swisher imagines a post Micro-hoo world in which Yahoo remains more independent than some might fear. She says the Web giant would clearly take the lead in areas such as media, communications, community and connectivity--as Yahoo offers a superior slate of communication tools and has the successful media experience (Yahoo News, Finance, Autos) that Microsoft lacks. Swisher says the combined company has the opportunity to excel in social media, but success will hinge on leveraging underutilized Yahoo properties like Zimbra, Flickr and del.icio.us.

One area where Microsoft trumps Yahoo is technology. This is a good thing for Yahoo, Swisher explains--because Microsoft is the only company that can truly compete with Google in this area, whereas Yahoo has been losing ground for several years. She adds that advertising should also fall under Microsoft leadership. Yahoo has the media relationships, but Microsoft has better automated technology, making it a potentially powerful combination. In the end, Swisher says, Yahoo President Sue Decker should head the merged entity

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