Justin Post, an analyst at the Wall Street investment bank, said such a deal would be a strategic positive in a view, in a research note.
A Yahoo/MSN-Microsoft combination would have garnered approximately 41% share in the US of search queries [in April] versus Google with 44%, Post wrote.
After all, Microsoft has been late to the Internet and Google continues to encroach on its territory, Post pointed out in his note.
Of course, Yahoo might not be for sale and even if it was, such an acquisition could be an antitrust red flag for US federal regulators, Post said. There also may be a conflict with Microsoft’s existing content providers, he said.
Wall Street seemed to like the idea and pushed Yahoo shares 2.25% higher to $31.37 on the Nasdaq following the news. The shares edged up to $31.55 in after-hours trading.
Post also said eBay Inc would be a potential acquisition target for Microsoft, given eBay’s Skype and PayPal technologies.
