Obviously, the big story in web-ville last week was the news that Microsoft had made a takeover approach to Yahoo!, a sure sign that the IT giant is increasingly insecure about the fact that, despite providing the operating system and primary software for the majority of PC users worldwide, they have failed to become the dominant service provider on the internet. Apple's dominance in the digital music space is known to irk some Microsoft execs, though it's the ever expanding Google that a combined Microsoft/Yahoo! would look to take on.
Yahoo! have not formally responded to Microsoft's $44.6 billion unsolicited acquisition offer, though an internal email from the web firm's CEO Jerry Yang, widely reported in the US press, admitted it was being considered, though he added it was "one of many options that we're evaluating".
Any merger of Microsoft's web ventures and Yahoo! would, of course, be of interest to competition regulators, in both the US and Europe. In fact, US Congress's Judiciary Committee have already announced they will consider Microsoft's takeover proposals this week, even before Yahoo! formally respond.
That said, the deal is likely to get more detailed scrutiny in the European Union, who have long criticised Microsoft for abusing its market dominance elsewhere in planet IT. EU Competition Commissioner Neelie Kroes confirmed this weekend the Commission would investigate any Microsoft/Yahoo merger, though she stressed that any past EU rulings on Microsoft's allegedly anti-competitive practices would not be relevant, and that this proposal would be considered afresh.
Actually, experts reckon that should any Yahoo! takeover get to the EU regulator stage it would probably ultimately win approval, because Google is so big in the market a Microsoft owned Yahoo! would operate in that the Windows giant would not really be overly dominant. Still, Google are sure to oppose the deal, and have already gone on record with criticism of Microsoft's proposals, with their chief lawyer David Drummond writing on a Google blog this weekend: "This is about more than simply a financial transaction - it's about preserving the underlying principles of the internet: openness and innovation. [Would Microsoft use Yahoo! to exert the same] inappropriate and illegal influence over the internet that [they] did with the PC?".
Microsoft's takeover proposal followed that previously reported announcement from Yahoo! that they were to cut 1000 jobs worldwide, an announcement that has led to speculation of a cut back of the web firm's music services, especially in the US.