Is last week’s announcement that Microsoft is hoping to buy beleaguered internet search company Yahoo! the first real sign that the software giant feels threatened by Google and its ‘freeware’ model? The offer from Microsoft to buy Yahoo! for $45bn may well indicate a growing awareness within the software giant that consumers and corporates just want to pay less - if anything - for their software.

Consumers are turning to Google’s free applications in droves and - as Verbatim has reported before - whilst corporates are still nervous about support issues, the use of freeware is becoming increasingly common within the less risky parts of many businesses.

Added to that, many corporates are being pushed towards using free software because it’s what their staff are demanding. Many younger ‘generation Y’ employees have grown up using free applications and having personalised iGoogle home pages. They want the same at work.

So, if the deal goes ahead, could we see the start of a battle to produce the least expensive software? Wouldn’t that be a nice thing…