But does it make business sense?
In a way this won't be the Microsoft founder's problem. This summer Mr Gates will leave the company to work full-time on fighting global poverty and diseases like Aids, Malaria and TB.
But the Microsoft managers who have to make it work will be asked whether this is a case of one failing giant trying to prop up another.
The Google factor
Yahoo has been on the ropes for a long time.
Once the top dog of the internet, the company has been haemorrhaging users and money. With advertising income not anywhere near where it should be, Yahoo's share price is stuck in the doldrums.
Last June Yahoo's board chucked out chief executive Terry Semel and brought back co-founder Jerry Yang to recapture the firm's dominance - to little avail. read full story