Thus, if it cant buy Google, buying Yahoo would be the next best thing, even if it costs Microsoft $100 billion to do it. A Yahoo buyout would be the biggest in Microsofts history as well one of the biggest in the history of the computer industry.Click here to read David Courseys commentary on why Googles investment in AOL might provide its ultimate undoing. In 2004, Microsoft disclosed that it had opened talks with SAP about a possible merger in mid-2003 after Oracle announced that it was launching a hostile buyout bid for PeopleSoft. The two companies broke off their talks, Microsoft officials said, because they agreed that the effort to integrate the two companies management would be too complicated. Microsoft didnt disclose the talks until it faced the possibility of having to testify about them in federal court during the U.S. Justice Departments unsuccessful lawsuit to block Oracles buyout of PeopleSoft. But its likely that Microsoft also determined that that the Oracle-PeopleSoft merger wasnt as much of a competitive threat at it seemed when the news first broke. Microsoft realized that it could gain similar market benefits in partnering with SAP on its NetWeaver application architecture rather than going to the trouble of buying the company outright. But a Yahoo deal might prove to be irresistible to a Microsoft that covets Googles dominance in the search field. But no matter how much it might be willing to spend for the likes of Yahoo, Microsoft wont be able to make a move without reckoning with government regulators. Even if Microsoft manages to strike a deal with Yahoo, government approval of the merger wouldnt be a shoo-in. Microsoft has spent much of the past decade in U.S. and European courts fighting charges that it wields monopolistic power in global PC markets with its Windows operating system and other products. To read about the settlement of a legal dispute over Googles hiring of a former Microsoft vice president, click here. Regulators are likely to think long and hard before they grant Microsoft the chance to become a dominant force in yet another market. Microsoft might find it would have to wage a court battle that eclipses the months of legal wrangling that held up Oracle before it won legal clearance to acquire PeopleSoft. That battle might even be more protracted if regulators in the EU and in individual Asian nations such as China or South Korea raise objections. But if Microsoft has decided that it cant survive without Yahoo in its stable, it will be prepared to spend any amount of money or overcome any legal hurdle to close the deal. John Pallatto is a veteran journalist in the field of enterprise software and Internet technology. He can be reached at firstname.lastname@example.org. Check out eWEEK.coms for the latest news, reviews and analysis about productivity
All of Microsofts previous acquisitions have been companies much smaller than itself and were aimed at extending its product line or to add strategic new technology.