In a bid to play catch-up with Google, Microsoft wants Yahoo to enter formal negotiations for an acquisition, potentially worth almost $50 billion.

There was action on the NASDAQ as Yahoo rose to $33.24, whereas Microsoft fell 1.26% to $30.58.

Industry watchers were sceptical about the possibility of such a venture, saying it would lead to duplication of a lot of services, unless the deal involved only online search advertising, where Microsoft trails both Google and Yahoo.

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