Microsoft proposes Yahoo tie-up to challenge Google

A long rumoured move by Microsoft has finally happening, the software giant is making an unsolicited takeover bid for internet portal Yahoo. It has offering 30 billion euros, that is 62% more than Yahoo's closing stock price on Thursday.

Scott Kessler, an analyst with Standard & Poor’s said this lets Microsoft better challenge Google: "If you think about this, it's really all about one thing - it's about competition with Google, and Microsoft and Yahoo frankly have had some difficulties being successful in competing with Google; they've had some small victories in the last number of months, but ultimately Microsoft decided the time was right to strike."

At the moment, Google is number one in terms of site visits with a monthly average of 530 million last year. Microsoft and Yahoo are not that far behind, but Google dominates the global Web search market. Microsoft is by far the biggest company in terms of the value of its shares.

Not only does Google have more than three quarters of the internet search market it is also strong in online advertising and is diversifying into software, mobile phones and navigational mapping.

Bill Gates' billions would be very useful to Yahoo which has been losing market share to Google. However critics of a merger say that Microsoft and Yahoo have very different corporate cultures and many overlapping businesses. Yahoo says it will evaluate the Microsoft offer "carefully and promptly."

The World's Cheapest Cars

In the market for a no-frills car under $10,000? Pack your bags. For that price, you've got to travel to emerging automotive markets like India and China.

The Tata Nano is the latest entrant into the cheap-car club. India-based Tata Motors (nyse: TTM - news - people ) says the Nano will roll out later this year. Price tag? About $2,500. The

four-door car will be the world's cheapest car, besting India's current cheapest vehicle, the Suzuki Maruti 800, which sells for 195,000 rupees (about $4,994).

The Maruti is the cheapest in India for now ( 195,000 Rupees; $4,994). It costs only slightly more than the Chery QQ, which is produced in China by Chery Automotive and sells there for 34,499 yuan ($4,781). None of these vehicles are available in the United States; they are barred from entry in their current conditions, because, like the Nano, they don't meet U.S. safety and emissions standards.

Complete List: The World's Cheapest Cars

"They are cars, but they are a step up from a motorcycle," says George Magliano, director of automotive-industry research for North America at Global Insights, a market research firm. For many, though, "It is the difference between walking and driving a car."

Behind The List
We searched the globe to find the world's cheapest cars. Along with the Tata Nano, Suzuki Maruti and Chery QQ, we found the Geely MR sedan, the Geely HQ SRV SUV and the Chery A1 sedan in China. Rounding out the top 10 are the Hyundai I10, Tata Indica, the Fiat Palio and the Renault Dacia Logan. All are sold in India; the Renault is also distributed in Romania.

The Maruti, a five-door hatchback, produces 37 horsepower and runs on 12-inch wheels. Four people, including the driver, can comfortably sit inside. Its top speed is 78 miles per hour and it can get 47 miles to the gallon.

The Nano is about 10 feet long and five feet wide. The two-cylinder petrol engine delivers 33 horsepower and a top speed of just over 60 mph. The basic model has no radio, air-conditioning or air bags, but it does have seat belts and a catalytic converter to reduce air pollution and gets 50 miles to the gallon. It meets all safety and emissions requirements in India.

What's more, the Nano may open the door for middle-class families in India to get behind the wheel of a vehicle for the first time, says Cody Lusk, president of the American International Automobile Dealers Association.

"That's what is happening globally," says Lusk. "There is a lot of interest and excitement that the middle class in emerging markets can get in a motorized vehicle."

U.S. consumers may feel left out, but Lusk says there is a big difference between "inexpensive and cheap." He recalls the "Yugo experiment" in 1985, when entrepreneur Malcolm Bricklin introduced to the U.S. market a low-cost vehicle built in Yugoslavia. It has the infamous distinction of being one of the worst cars ever sold in the U.S. It lacked safety features and was poorly constructed.

China manufacturer Geely Automotive tried to woo U.S. buyers with its products, which include the Merrie hatchback, a couple of years ago, but "it was not ready for prime-time," Lusk says. "It failed to meet U.S. emissions and safety standards. Geely would have to restructure and rebuild the vehicles to meet our specifications. The vehicles were less than overwhelming."

The Chevrolet Aveo, which has a base price of $10,895, is currently the cheapest car available in the United States. But two Smart ForTwo models will be nipping at its heels this quarter. That's when USA Distributor, a subsidiary of Penske Automotive Group (nyse: PAG - news - people ), will begin selling the entry-level coupe for $11,590.

Stockholm starts Absolut auction

The Swedish government is saying "skol!" to the drinks industry as it formally launches the

auction of Vin & Sprit, the maker of Absolut Vodka. It is the biggest move yet in Stockholm's sell off of state assets and is likely to be one of the largest and most fiercely fought corporate auctions of the coming year.

Four of the world’s biggest drinks groups have indicated an interest in buying the Swedish distiller. They are France's Pernod Ricard, Bacardi which is headquartered in the Bahamas, Fortune Brands of the US and Britain's Diageo. In addition a bid could come from a group including the Swedish private equity firm EQT.

The Swedish government has said that only bids for the whole of V&S will be considered and the price offered will be the main determining factor. It has not made it a requirement for the s

ale that Absolut production has to stay in Sweden.

Analysts estimated the winning bid will have to be more than four billion euros. Nearly 89 million litres of the vodka were sold in 126 countries last year.

Bush Welcomes Russian President Putin to the White House

PRESIDENT BUSH: Thank you all. Please be seated. I'm pleased to welcome my friend, Vladimir Putin, back to the White House. We just had a constructive meeting and a candid conversation. I told the President how much I enjoyed visiting Russia earlier this year, and how much I'm looking forward to going back to Russia for the G8.

I also thanked President Putin -- Vladimir -- for Russia's offers of assistance in the wake of Hurricane Katrina. It meant a lot to know that you cared enough to send critical supplies, and our country really appreciates it. People are going through some tough times down there, and I think it lifts their spirits to know that not only Americans, but Russians care about their future.

We've got a strong ally in Russia in fighting the war on terror. You know, it was about four years ago that our country got attacked; one year ago, there was Beslan, both of them brutal attacks, both of them attacks by people who have no regard for innocent life. And we understand we have a duty to protect our citizens, and to work together and to do everything we can to stop the killing. That's why we hold office.

And I appreciate you very much, and your understanding of this war on terror. We also understand that we've got to work to stop the spread of weapons of mass destruction. We understand the stakes that people who kill in cold blood, if they have weapons of mass destruction, will kill in cold blood on a massive scale. And I want to appreciate you for your understanding, and thank you for your understanding of that.

We both signed the International Convention on the Suppression of Acts of Nuclear Terrorism, which was a positive statement by the world. We discussed our efforts to work together in Iran and North Korea. We both -- we have the same goal: We don't want the Iranians to have nuclear weapons and we don't want the North Koreans to have nuclear weapons. We talked about ways to achieve those goals.

We talked about the need to improve nuclear security. This year we reached a milestone in nonproliferation cooperation by completing the conversion of 10,000 Russian nuclear warheads into peaceful fuel for U.S. power reactors. And I appreciate very much that sense of cooperation. That's good for the world to see.

We talked about our economic relationship. Russia has got a growing economy. We have products that they want, and they've got products that we want -- like energy. And it's necessary for us to have a good economic relationship, one where we resolve our differences in a wise way. I told Vladimir that I'm very interested in seeing if we can't get -- complete the negotiations for Russia's entry into the WTO, the World Trade Organization, by the end of this year.

As we strengthen our economic ties we'll work to advance freedom and democracy in our respective countries and around the world. Russia has been a strong partner of the United States, and will be an even stronger partner as the reforms that President Vladimir Putin has talked about are implemented -- rule of law, and the ability for people to express themselves in an open way in Russia.

I don't know how many visits we've had. I haven't been counting them because I've run out of fingers on my hands, but there's been a lot. And every time I visit and talk with President Putin I -- our relationship becomes stronger. And I want to thank you for that. Thank you for coming to the White House to visit. Welcome.