Citigroup analyst Mark Mahaney said that Microsoft's bid for Yahoo "makes sense" from a broad Internet perspective.
"For Microsoft, or any other company seeking to gain scale in Internet advertising, Yahoo is an obvious strategic choice given its position as one of the top three Web properties worldwide," Mahaney said in a research note.
He said that if Yahoo wanted to remain independent, it will have to show investors that it is willing to take "radical, value-creating steps."
Yahoo said it was examining the "unsolicited proposal" and added that its board "will evaluate this proposal carefully and promptly in the context of Yahoo's strategic plans and pursue the best course of action to maximize long-term value for shareholders."
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