As both firms struggle to compete with Google’s stranglehold on the web, Microsoft has made an offer of $44.6bn in cash and shares to buy out Yahoo! in a bid to compete with Google and restore it’s failing monopoly.

Yahoo! are said to be taking the offer seriously, after announcing a $300m spend this year to try and revive the company and admits to receiving the ‘unsolicited’ offer, which could act as a lifelife for the ailing giant after a string of layoffs and a 23% drop in profits in the last quarter of 2007.

Microsoft’s Kevin Johnson said..

“Today the market is increasingly dominated by one player..”

Why does any of this matter? Because in the largely self-governing online world, the rise and fall of monopolies, fueled by billion dollar buyouts is an inevitable fact, which stifles competition and further alienates the humble start-up, as well as the more established companies with less buying power. The end result is less choice for the end-user, and a less democratic internet for everyone.

This act of desperation from Microsoft is hardly going to put a dent in Google’s online presence, and will only serve as an expensive embarrassment when it fails to do so.