Hey its great to finally read an article by someone who understands that building a world leading web service isn't just as simple as putting number 2 and 3 together on paper and gaining market share.
At least AOL / Timewarner made sense as a synergy (distribute Warners' movies and music to AOL's subscriber base).
Yahoo! and Microsoft have many like for like products/services and are nearly diametrically opposed in terms of the technology. Attempting to merge the two would be at best a bloodbath and in the worse case a disaster.
"(Microsoft) would need to move far away from its own proprietary software. The software/service provider would have to tap into the open source work done by Yahoo! and embrace the vibrant open source world where, frankly, the really interesting web infrastructure technology is being built.
In so doing, Microsoft would send a clear message to many of its largest customers. "A Microsoft-based web infrastructure is probably not the most economical or exciting path for you to take."
Exactly. However one suspects Microsoft's strategy is not to adopt Yahoo! but to cherry pick the choice bits, retool and re-badge them as an (inferior) .net / windows platform and eliminate the rest as competitors.
Yahoo!'s best hope for survival maybe to emulate Netscape, open source versions of their code and release it into the wild...