In a move that has come as both shocking and expected, Microsoft has made a public bid for Yahoo!, the search company. While everyone on the internet debates the impact such an acquisition could have on said internets, I find it incredibly interesting that Microsoft would make such a move. However, the more I think about it, the more I see this as a smart move on their part.

Microsoft is currently falling behind Google and Yahoo when it comes to internet search, while Google and Yahoo have been battling for number one search engine for the last few years, Microsoft has lent itself to just being where it’s at. Well if Yahoo agrees to the Microsoft acquisition, this would put Microsoft at number 2 in search. Search engines are starting to rule the internet, because people are starting to learn that almost everything starts at one. If someone has a question about something, they usually will hit up a search engine in hopes of finding it. However, Google is proving that it is not all about search, it’s about tools as well. Using data gathered from searches, blogs, and other user data, Google is becoming a data warehouse for everyone’s internet data. Don’t believe me, then go type your name into Google and see what happens. You’ll be amazed how much of your data lives on the internet and is being indexed by the likes of Google and Yahoo.

The other thing that Microsoft is buying with its purchase of Yahoo, is the tools. Yahoo has webmail, PIM management, a widgets engine, Pipes (really cool for making mash ups), and other nifty tools that they have developed in hopes of competing with Google. That’s a large catalog for Microsoft to become the owner of. Now, the question is will Yahoo continue to run on its own, or will Microsoft start leading the development of the current projects Yahoo has under its belt. If Microsoft takes over, I believe they will let several elements die while merging the better parts into their own systems. Could Microsoft strip the Yahoo search algorithms and insert them into Live Search in hopes of making Live Search just as good as Yahoo? It would be a mistake for Microsoft to just let Yahoo die. Yahoo has some serious name recognition when it comes to internet folks.

This is all speculation at this point because I’m not sure if anyone really knows if Yahoo will accept the offer. Though if the rumored lay-offs are in fact true, it might make sense for Yahoo do accept the offer in order to keep their staff and move forward. The deal doesn’t seem like it would be a totally bad thing for them. The way the letter from Mr. Ballmer proposes the acquisition is more of a joining of the minds. But I would be interested to see what really happens should Yahoo agree to the acquisition this time around.