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Google is back over the $500 mark, closing the day at $506.80 per share. This while stocks plunged sending the Dow industrials tumbling to their biggest drop since February 2007. Some are talking recession.

Meanwhile, Microsoft and Yahoo closed the day with 3.7% and 1.2% drops in stock value, Micorsoft closing at $29.07 per share while Yahoo closed at $28.98 per share.

With regard to the possible Microsoft Yahoo merger, although Yahoo has yet to respond to Microsoft’s offer to buy them out for $44.6 billion, analysts are saying a merger is likely to happen.

Google Inc. has apparently attacked Microsoft Corp.’s bid to acquire Yahoo Inc. calling it, in the words of Jeffry Bartash and Morning Zhou writing for Marketwatch, “an effort to extend its software monopoly to the Internet”.

Google executive David Drummond has made a statement to the effect that a Microsoft acquisition of Yahoo could undermine open competition on the Internet. In a blog post Drummond wrote [Read more]

Google continues it’s downward spiral. At last report the stock had dropped to $515.90 per share. The current share price as of the writing of this post is $495.43.  Meanwhile, Yahoo share price is up by 3.35% owing to Microsoft’s offer of a 45 billion dollar buyout.

The last report on the possible buyout of Yahoo is that Yahoo has not made any decision and continues to explore all options, one option of which is reportedly a possible partnership with Google.

If you ask John C. Dvorak, respected columnist who has written for such lofty publications as Forbes Magazine and currently writes for Dow-Jones’ Marketwach and PC Magazine’s Inside Track, a Microsoft-Yahoo merger is never going to happen. Dvorak writes in his piece “JOHN DVORAK’S SECOND OPINION: Microsoft and Yahoo deal will never consummate - Commentary: It’s a bad idea, plus EU regulators will have a field day” that anyone who thinks this merger will happen is crazy. [Read more]

Not buying yahoo stock might have been a mistake. Microsoft has offered to buy Yahoo for $44.6 billion and shares of Yahoo stock have jumped by 62%. As Rex Crum writes for IMG Direct:

Technology stocks largely closed with gains Friday, but everything else took a back seat to the overwhelming attention given toward Microsoft Corp.’s unsolicited $44.6 billion offer to acquire Internet giant Yahoo Inc.

The deal values Yahoo (YHOO) at $31 a share — a 62% increase over Yahoo’s Thursday closing price of $19.18 a share — and would be the biggest acquisition in Microsoft’s (MSFT) history.

Yahoo shares surged $9.20, or almost 48%, to close at $28.38, while Microsoft shares were down $2.15, or 6.6%, to close at $30.45 as investors reacted to the proposed deal.