I think it's just M$ being like "OMG Google". They feel a desperate need to compete, it's sort of in their "corporate DNA". When I started working there around 1995, they were all "OMG Netscape".

Odd, why did I have to explicitly re-friend you when you changed your name?

I purged Friends-Of in the rename. I was FO like 50 stale accounts.

Emo!

I have a hard time taking anyone seriously who still uses "M$". M-dollar sign. Edgy and witty ITT.

Anyhow, Yahoo isn't exactly in a great place to be, and MSFT is probably just getting a userbase by buying into YHOO's brand. Of course, it is not like YHOO is all that great of a brand these days. There are a lot of functions that would be replicated by a merger, so I cannot see it being more than snapping up the few functions that MSFT does not already have and gettings a userbase. I know that YHOO has acquired various companies over the years, so there could be IP or technology in those areas worth mining out of the merge.

The best reactions are probably going to be here though:
http://minimsft.blogspot.com/
http://msftextrememakeover.blogspot.com/

The best point I've seen is that there will be little upfront ROI on the deal. I cannot see any real ROI for a decade, if ever.

"O NOES I'm like 20 years old and 'M$' is this ancient dinosaur term from back when Mosiac was new you're so unhip hahahahaha"
What the hell was that about dude? Can you not enter a conversation without a weak snark?

Users? Or ads share? They've been flailing around at ads steadily for awhile now.

The redundant functions might be kept, temporarily. M$ has a habit of keeping more than one dept internally trying to solve the same problems, so it can put them head to head in its own little mini-Galapagos of accelerated evolution. However, they're also amazingly bad at rolling whatever wins out to the world in a useful way - I'm totally with the analysts that say things like "Office should have been on the web 5 years ago" but they've been a shipment of fail so far at even getting the diverse (and sometimes quite keen, surprisingly) offerings of hotmail/msn/live/whatever they're calling their online services this month OUT to people. You have to really dig around to give yourself the illusion MSN/live is all done by the same company. hey need to solve THAT problem before they could get ANY use out of Y!'s brand strengths. (That said, Y!'s done a shitty job with Flick'r and really alienated a lot of people, which is a huge shame, because flickr still has potential to be a remarkable core service if someone would actually start treating it as such. I'd rather see Google with Flickr, because they've proved they can at least handle offering a (eternally beta) apps service.

"weak snark"
Yeah, but not as weak or as tired as "M$".

I've heard for a while now that the MSN team has always been a dumping ground. The overall management might be bad and
"You have to really dig around to give yourself the illusion MSN/live is all done by the same company. "
I'm not sure I agree with that, some of the things are islands, but they have strong enough interlinks and branding on some parts of it. Spaces is a mess and is just hideous.

ooo, I just posted on that. my bonus theory: steal underpants employees -- who will flee that very grasping.

I think that seems too simple. M$ has done enough acquiring to know about brain drain in hostile takeovers - they'd send the people they need most straight to google. I'm leaning towards personally thinking someone at M$ has been wanting to do this for a LONG time, and made a call that the current economic situation made this the time to snatch in. I think it's an emotional decision based on something that was valid in the past and the mental model hasn't been updated to NOW yet. Maybe someone's recently come in to some power and needs to make a big risky play to get noticed. Economically, it's a good time to be predatory IFF you think things are going to recover within 2-3 years.