Macrosoft?

Macrosoft?

So who said mergers are dead? Last week a granddaddy of an acquisition was proposed, and if it succeeds, it may change the future of the Internet.

Microsoft took advantage of the sagging stock price of Internet giant Yahoo and made an unsolicited takeover offer of $44.6 billion. The move was Microsoft's latest and largest effort to compete with Google for online search and advertising dollars.

The outlook was uncertain when this story was printed. But the implications were clear. Economic woes have depressed stock prices enough to have created buying opportunities. That's one indication that experts think the dip in the economy does not have too much further to go.

The takeover bid is also a signal that the biggest prize in corporate America is in cyberspace. The controller of entry to the vast online world stands to reap a fortune, as that is where much of the commerce of the future will be conducted. The two largest competitors for that honor are likely to be Google and Microsoft. Their rivalry has only just begun.

Stimulus Overreaching

Corporate interests should probably have been more careful about what they wished for when it came to the legislation now roaring through Congress that's designed to spur economic growth.

The so-called stimulus package is supposed to give the economy a shot in the arm by cutting taxes in ways that put dollars into people's pockets and encourage businesses to keep buying productive equipment. Experts agree that such a quick fiscal boost could help prevent the economy from falling into a recession -- defined as two consecutive quarters of shrinking economic output.

But instead of keeping things simple, the Senate Finance Committee last week succumbed to the temptation of helping the loudest-shouting interests at its front door. In addition to the tax rebates for individuals and accelerated write-offs for businesses that President Bush and House leaders had agreed to, the committee added other goodies including tax benefits for marginal oil wells and coal companies. How those would goose the economy is hard to see, but they were added anyway.

The backers of those provisions crowed, of course, but their victory will probably be short-lived. Thanks to their gluttony, Senate Republicans may now have enough votes to kill the Finance Committee legislation, charging that it has been taken over by "special interests." The extra baggage has also delayed approval of the economic assistance that the stimulus bill will certainly provide. No one benefits from that.

Subtracting From Sprint

The combination of Sprint and Nextel seemed like a good idea at the time. But it has not been working out so well.

Last week, Reston-based Sprint Nextel said it might write off as much as $31 billion related to the 2005 merger of the two companies. The charge is likely to result in a fourth-quarter loss.

AT&T and Verizon Wireless have been stealing away customers from the company at a rapid clip. Sprint lost about 1 million subscribers last year alone. In December, the company brought in a new chief executive, Daniel R. Hesse, to try to right the listing ship. So far, he has cut 4,000 jobs, closed 125 retail stores and done some housecleaning in the corporate suite.

The open -- and important -- question is whether the $35 billion combination, which created the nation's third-largest wireless company, will finally result in a fully integrated company that can compete with its larger rivals.