There has been a lot of speculation on whether a deal with Yahoo/Microsoft will happen. I feel that this merger will happen and have outlined several reasons as to why this deal is almost a sure thing at this point.

Top 5 Reason Why the Yahoo/Microsoft Deal will Happen:

1) Microsoft needs Yahoo more than Yahoo needs Microsoft. To compete with the threat of Google and other Internet giants Microsoft would benefit huge from a deal like this. It would catapult them into the #1 Internet player ahead of Google instantaneously. Microsoft will pony up big to gain this status.

In what looks like a last ditch effort to fend of Microsoft's bid Yahoo is close to announcing a deal that with Google that would carry search advertising from Google Inc. as part of a test that could lead to a broader partnership.

According to the WSJ Online it will be a two week test limited to no more than 3% of US traffic of Yahoo's Web search results. The test will allow the two sides to evaluate the revenue potential of a broader search ad outsourcing arrangement.

Looks like Microsoft is going to play hardball. They're going to try to force this merger. Read the letter Ballmer sent to Yahoo! executives today:

FOR IMMEDIATE RELEASE MICROSOFT SENDS LETTER TO YAHOO! BOARD OF DIRECTORS REDMOND, Wash. — April 5, 2008 — Microsoft Corp. (NASDAQ: MSFT) today sent the following letter to the Yahoo! Inc. (NASDAQ: YHOO) Board of Directors:

April 5, 2008

Board of Directors Yahoo! Inc. 701 First Avenue Sunnyvale, CA 94089

Dear Members of the Board:

Yahoo! has become the first big search portal to allow users to search the web with their mobile phone using only their voice. The service is called Yahoo! oneSearch. It is currently available for BlackBerry Curves, Pearls and 8800 series phones. No mention of the iPhone yet, but they do plan on supporting other vendors soon.

The WSJ seems to put to rest the idea that Microsoft will sweeten its $44.6 billion offer to buy Yahoo! Microsoft feels that it can wait and is prepare to hunker down and battle till the end. They feel amid the turbulent economic times that their offer is more than fair.

Often mergers are seen as synergistic business opportunities. Plans usually revolve around numbers and making them work. More focus should be put on merging corporate cultures. This is often much more difficult and can spell disaster especially for large corporate mergers.