PCWorld is reporting that Microsoft is offering $46B to buy Yahoo, although they have no details yet. I've seen this rumor floated for a year or two now, and it's never made sense to me. Just think of all the overlap: search and mail come to mind right away. Yahoo is already laying off thousands; if they merge into Microsoft, they'll have to lay off more.

Then there's the "cultural fit" issue. Microsoft is very much an "eat your own dog food" kind of shop (and I think that's a good thing). However, does that mean they'll start rewriting the various Yahoo services they are acquiring with Microsoft technologies? That's exactly what they did with HotMail, for instance. This means they get to pick which issue they would rather confront:

• Umm, yeah - we run that large service on Linux using PHP and Perl....
• We get to spend countless millions more to convert it

I have a better idea for Microsoft (assuming this is more than a rumor): fire the people that came up with idea of buying Yahoo. The severance packages will cost you a lot less, and the bad ideas they generate in the future will hurt someone else.

Update: As comments roll in across the Blogosphere, here's my advice to anyone at Yahoo, or the parts of MS that overlap: regardless of the verbiage that gets tossed around, prepare for internecine war. Every group that feels threatened by "the other guys" will be out for blood within weeks - which is why I think this is a really, really bad idea.

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