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Transcription of this question: 3.The battle Of the online search enginesThe online search engine market doubled from USS40 billion in 2008 to USS80 billionby 2010. Google, with the largest market share, benefited most from this growth. An executivefrom Microsoft, a market rival, says that the industry will be better served by having an alternativeto the dominance Of Google.Microsoft S objective is to quickly gain a bigger share Of the online search engine market byexternal growth. After pursuing unsuccessful internal growth strategies, Microsoft launched aUSS45 billion hostile takeover bid for the search engine business Yahoo!.Yahoo! has many Other services, such as e-mail. However, because Of its lack Of focus,Yahoo! has fallen behind Google. Yahoo! recently suffered a decline in profit causing its shares to fallby 40%. As a consequence Yahoo! cut 1000 jobs.If successful, MicmsoftS takeover Of Yahoo! will combine the second and the third largestcompanies in the online search engine market. This takeover would result in extensive job lossesbut also in cost savings Of at least USSI billion. Moreover, the combination Of the two companies’engineering resources and expertise would expand the research and development (R&D) capabilityto produce more innovative services.The proposed takeover is likely to attract government investigation into the market share Of thecombined organizations. Together, Micmsoft and Yahoo! would account for 35% Of the onlinesearch engine market.Yahoo! has so far been able to resist the takeover bid. Microsoft is now looking for alternative growthstrategies such as mergers with Other possible partners.(Source: adapted from Dominie Rushe, Whet(Question 3 continued)(a)(b)(c)(d)Define the following terms:(i) market share(ii) external growth.Draw The Boston Consulting Group (BCG) matrix for 2010 and distinguishbetween the position Of Micmsofts online search engine and Google S onlinesearch engine.Examine the possible effects that a successful takeover bid by Microsoft OfYahoo! would have on employees and one Other stakeholder.Discuss Mic,’0S0ftS decision to launch a hostile takeover bid for Yahoo!.[2 marks][2 marks][6 marks][6 marks][9 marks]

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