Microsoft's share price has taken a beating lately, in part because of the company's increased spending on R&D. Microsoft may be preparing to write a much larger check, as the Wall Street Journal is reporting (subscription required) that the company and super-size Internet portal Yahoo! have been in talks over Microsoft's possibly purchasing an equity stake in the portal.
Here's the rationale. Despite Microsoft's efforts over the past couple of years and a promising Windows Live beta, the company is still arguably far behind Google in search, advertising, and web services. In the meantime, Google is making moves that could be interpreted as positioning it to encroach on Microsoft's turf, such as buying Writely and launching the Google Page Creator. In addition, MSN/Windows Live is a distant third in search engine usage, according to Search Engine Watch.
News source: ArsTechnica
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