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The Microsoft-eBay merger rumors are true. EBay has the power here, or at least Microsoft thinks so. They spun Bill Gates' (pictured, duh) retirement as his chance to fully run his charity, the Bill & Melinda Gates Foundation. The president of a major web company tells the Wag:

Gates stepped down in an attempt to convince [eBay founder] Pierre Omidyar that Gates shares all the same values as Pierre in terms of charity. It was a huge signal to Pierre that Gates is following in Pierre's footsteps by stepping down and focusing on word issues full time and remaining Chairman of MS like Pierre has done. The premise is that with a combined MS-Ebay they can do more for the world together.

MS should hope Pierre gets the message and can still influence decisions like this. EBay CEO Meg Whitman just told the Financial Times that big-time mergers are unlikely right now. In other words, she just needs a sweeter deal.

Ebay cautious on web mergers [Financial Times]