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The vast majority of Google's net income comes from online advertising. An entry by a combined Microsoft and Yahoo into this market could hit Google hard.
The combination will allow Microsoft to leverage its control of IE, the operating system and its enterprise software to build a more intelligently combined desktop and online computing experience that will leave Google playing catch up. Although Google is extremely powerful in online advertising and is a famous provider of some online services (GMail and youtube), Google's reach is currently limited to the internet. A combined Microsoft and Yahoo would be a significant second player in online advertising as well as the dominant player on the desktop and within the enterprise...
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