Why Microsoft Should Forget About Yahoo and Buy Palm

Nearly a year ago, Microsoft made an unsolicited $44 billion bid to buy Yahoo. No good came of it: Yahoo’s executives, who appeared chronically allergic to any move that might reward shareholders, wasted a precious year fending off Microsoft (MSFT) rather than finding a way to beat their chief corporate rival, Google (GOOG). Microsoft emerged looking no better; as it puzzled for months over whether to go all out for Yahoo (YHOO) or leave it alone, the company seemed to fall ever further short of developing a business strategy to compete with its main rival–yes, Google again. Do you see a pattern here? The only beneficiary of all of these chaotic merger talks has been the company that Microsoft and Yahoo are most desperate to beat.

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