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this is story of microsoft and yahoo company...

The idea of Yahoo and Microsoft getting together has been out there for years, often scoffed at, but making sense in Yahoo’s large lead in search against Microsoft and that company’s failure to quickly gain on Google, much less Yahoo.

Back in May 2006, then Yahoo CEO Terry Semel now famously quipped about Microsoft having "no chance in search:"

In a breakfast interview with New Yorker writer Ken Auletta, Mr. Semel, a former film industry executive, swatted down the idea that Yahoo ever talked about an outright sale to Microsoft. Instead, he said that they tossed around the notion of Microsoft buying a stake in Yahoo’s search business — a transaction that he compared to an amputation.

“Microsoft taking over Yahoo — that conversation has never come up,” Mr. Semel said. “[We discussed] search, and Microsoft co-owning some of our search. I will not sell a piece of search. It is like selling your right arm while keeping your left — it does not make any sense.”

Indeed, Mr. Semel’s less-than-flattering comments about Microsoft made an alliance between the two companies seem even more unlikely. “My impartial advice to Microsoft is that you have no chance,” he said. “The search business has been formed.” He also suggested that Yahoo employees might chafe under Microsoft’s control.

If Microsoft now actually buys Yahoo, some might say they had the last laugh. But then again, it is to some degree an acknowledgment that Microsoft did need Yahoo, after all.

In 2007, more news of talks came out, but these went nowhere (see here for a Ballmer reaction). But the letter to Yahoo from Microsoft suggests that Yahoo doesn’t have the luxury of sitting back:

In February 2007, I received a letter from your Chairman indicating the view of the Yahoo! Board that "now is not the right time from the perspective of our shareholders to enter into discussions regarding an acquisition transaction." According to that letter, the principal reason for this view was the Yahoo! Board’s confidence in the "potential upside" if management successfully executed on a reformulated strategy based on certain operational initiatives, such as Project Panama, and a significant organizational realignment. A year has gone by, and the competitive situation has not improved.

Microsoft has developed a plan and process that will include the employees of both companies to focus on the integration of the combined business. Microsoft intends to offer significant retention packages to Yahoo! engineers, key leaders and employees across all disciplines.

I hear :

Microsoft has proposed to Yahoo’s Board Of Directors that Microsoft acquire all Yahoo shares for $31, which is currently estimated to be worth $44.6 billion. Yahoo shareholders would get either cash or Microsoft shares (0.9509 of shares per 1 Yahoo share), though the entire deal couldn’t involve more than half payment overall in cash ($22.3 billion). The price is said by Microsoft to be 62 percent higher than what Yahoo shares went for as of the close of trading yesterday. Note that former Yahoo CEO Terry Semel has just stepped down as chairman of the board, with existing board member Roy Bostock now stepping up.

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