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Microsoft bids on Yahoo

Micrsoft Corp made a $42 billion bid to acquire Yahoo Inc. Friday, Yahoo News reports. Microsoft hopes the move will help topple internet rival Google Inc.

Microsoft, known for its software programs, forsees trouble unless it diversify by giving people access to computer programs online. As more and more people get their news and entertainment from the internet, online advertising will become an $80 billion market by 2010.

Yahoo has not yet agreed to the acquisition, but analysts predict the company, whose stock sunk to a four-year low this week, will most likely acquiesce. Wall Street, however, is unsure about the proposal: Yahoo's stock is up 48% since the announcement, while Microsoft's is down nearly 7%.

If the companies do combine, their U.S. audience will be 142 million, about 18 million more than Google's.

Yahoo was once the internet's dominant search provider, but the dot-com burst left a gap in the internet that Google was more than willing to provide. Google now controls more than 60% of the U.S. search market, USA Today reports.

It is still unclear whether the acquisition would violate U.S. and EU antirust laws.