here in new york, th me, steven levy of "wire magazine an erick schonfeld coed for of chcrunch blog. i am pleased t have all here. nick, telle, how this deal happened first. >> it startedast year wh the e.o. of mrosoft, steve bamer, making a unsolicited bid for closed to $48 billion to acquire i can't ovment never happened, yao! resistedhe offer. temp apartfast forward to about janry, yahoo! has new c.o., carol bartes and microsoft and yahoo! start lking about a more limit dealnot a full blown acisition in which microsoft basically take overhe search operations, handle the search operations on yahoo! in exchange for some value. and the deal went throug all sorts of fits and starts and finely arrived at the deal y described a momentgo. all of this being designed to improve microsoft's fairly po position in search right now which street a highlylucrative rket, the online advertising maet that accompanies search. and one that microsoft reall has not had much success in o its own. >> charlie: is this a gd deal for just crosoft or od al for microsoft and yahoo!? >> the shareholds of both

"we are now the state that can't," said steven levitt -- steven levy, from a private research organization. "it can't agree on is what the problem, it can balance its budget, it can't decide over prisoners as though for office -- focusing about immigrants." was a response? guest: i think it is true to a large degree because i think a lot of would make california a unique are contributing to what has become sort of a permit gridlock in state government. one of the main things is that california for a long time allow its voters to make decisions on how to run the government, gov. schwarzenegger was elected in a voter recall, and what they call ballot box budgeting where voters go to the ballot and and say how much they want to spend on various programs but they don't necessarily provide the money to pay for it. that is something kind of like the will of the people, is very important to the california culture, but also created a situation where the state is forced to spend all of the money, the elective leaders don't have that much control and a lot of areas. that is part of it. and the other