
We tend to forget that Microsoft is, before all else, a profit-generating machine. Like it or not, the strategies that MS uses to insure income are just that - income generating strategies.
Rather than worry about the Yahoo! developers, one needs to ask: how will Microsoft use the acquisition of Yahoo! to generate revenue that follows their existing mind-set? Unlike Google or Amazon or the other "successes" in driving revenue from "new computing" and "Web 2.0", Microsoft looks for using other products and services to drive customers deep into their "core" business, buttressing their ownership of the entire value stream by force-fitting other products and services into the same "total ownership" model.
Today it's not about buying your way into a market, unless you are just mopping up some customers from a weak competitor. It's all about creating a new paradigm and getting "fresh" customers that stay with you through the growth phase, even if it's an initial loss.Bezos realized this at Amazon back in the beginning, as did the folks at eBay when they bought PayPal. eBay and PayPal are actually better examples of what Microsoft SHOULD be capable of: eBay recognized that providing a secure settlement service for the auctions was as important as the auction itself - complementary services that combined become the "killer app".
Microsoft did this once upon a time by providing Windows and Microsoft Office as the one-two punch of the "killer" business application. Now the world has moved on, and Microsoft needs new mountains of cash to mine.
Will a Microsoft-Yahoo axis turn the tide against the Google juggernaut? I seriously doubt it: neither party brings anything new to the table, and both have failed to manage a paradigm shift based on portals. Indeed, the Yahoo! portal is mostly used by the AT&T (er, at&t) customers that get it as their default web page with their broadband service. Not branding here, just convenience. And the Microsoft ownership of Yahoo! may jeopardize even this tenuous toe-hold with at&t.
No, this isn't a move by MS to leverage Yahoo! for something new: it's a salvage operation to take over Yahoo!'s customers to infuse Microsoft's flagging online customer base with new blood. Maybe Microsoft HAS learned a lesson in all this: it's better to be a poor second to Google in the search market, but OWN that second place securely than to spend the time and effort to fight for second place and possibly losing everything.
(Empty mug ==> coat ==> door ==> light up ciggy...)