Microsoft has put in a £22.5bn bid for search engine Yahoo.
Microsoft said the planned acquisition would create a more competitive company that would be able to provide better choice and innovation for customers and partners. The software giant hopes the acquisition will help it compete with Google in the online advertising market and deliver video and high-value internet content.
The proposed acquisition represents a sizeable chunk of Microsoft's $55bn (£30bn) annual turnover. It could ultimately result in the company shifting its focus from business infrastructure based on Windows to an online search engine and web communities financed by internet advertising.
"We have great respect for Yahoo, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market," said Steve Ballmer, chief executive officer of Microsoft.
Ray Ozzie, chief software architect at Microsoft, said Yahoo had played a significant role in developing the internet by building compelling, high-scale services and infrastructure.
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