Microsoft will buy Yahoo

There is only so much pain YHOO share holders can take as they see its price slowly bleed away from that magical $31 dollars

From the news headlines, it looks like Yahoo knows what it has been doing by placing incredible earnings, but looking at the income statement shows something different. Comparing operating income, Yahoo fell down from 169 million to 121 million yoy.

The reason Yahoo has incredible earnings was because of something called 'Equity In Affiliates' which accounted for 455 million last quarter. I am not an accountant so I don't know what Equity In Affiliates means for sure, maybe it's ownership in other companies.

One thing that I do know is that it is not operating income. Yahoo's core business is actually bringing in less income and they are boosting their earnings with some other accounting jargon.

A merger with Microsoft will be the best thing for Yahoo shareholders as well for Microsoft. Google is the growing tech giant right now and both companies need to get their game together if they expect to compete with a much stronger company.

Yahoo and Microsoft can provide real synergy with each other's services so they can combat the 2000 lb gorilla of the Internet. Google will still probably be number one in search, but Microsoft and Yahoo could create an effective alternative that people will want to actually use for once.

I don't see any other ways Yahoo could bring more value for its shareholders than with this merger. If Yahoo had real leadership, they could find ways to exploit their own strengths over Google so it can offer a strong alternative. Instead, they are following Google which is just stupid, because they won't be providing a service that is any better.

If Yahoo's CEO doesn't like the offer from Microsoft, their shareholder will as the stock whithers away. It's only a matter of time.