For the first time that I can remember, Microsoft is actually facing formidable competition in the form of Google. I didn't understand the scale of the battle until recently, and here's a great article to put it in perspective. What it boils down to is M$ demands dominance in their business model, but at the same time do not seem dynamic enough to keep up with the "new blood" in IT. The real winners here will be consumers, as Cringely points out. A potential merger between M$ and Y! would benefit neither, as both companies are more concerned with the bottom line and dominance than with pleasing their customers. Yahoo is fabulous at execution, which Microsoft generally isn't, but neither company is today a leader. They are quick and brutal followers. Keyword being brutal. Hat Tip: Pajamas Media