Microsoft (MSFT) Looks To Yahoo! (YHOO) For Delivery Of Online Software

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It is now plain that part of the reason Microsoft (NASDAQ: MSFT) wants to buy Yahoo! (NASDAQ: YHOO) is to use its customers as targets for Redmond’s big push into online delivered software. Google (NASDAQ: GOOG) has already made a significant move in this business with Google Apps.

Microsoft announced that it will expand its offerings in the server side software business by improving its word processing, spreadsheet, and presentation software.

As one analyst told MarketWatch "Yahoo is essentially a software-as-a-service company by definition, so there is a lot of merit there. On a more forward-looking scenario, you could see Yahoo serving as the distribution channel given the existing infrastructure.

Yahoo!’s 130 million unique users in the US would be a healthy platform for delivering the new range of Microsoft’s online Windows apps.

Douglas A. McIntyre