In the recording of today's Open Season podcast,. A bit brutal, perhaps, but one gets the sneaking suspicion that he may be right.
One big question to be answered in such a merger is whose platform prevails? Microsoft's, of course. But Microsoft's platform (.Net, etc.) may be doing well in the enterprise but it's a complete bust on the Web. Try to think of a single cool startup (besides MindTouch) that is building on .Net? Time's up. There really aren't any.
Microsoft is going to need to look beyond Windows and .Net to tap into the fast-rushing flood that is the Internet. Google owns the Web right now, and it does so with open source, open data, and LAMP. Yahoo is a child of the LAMP revolution and could help Microsoft to see the light...if Microsoft is interested in a world where no one entity (and certainly not it) controls the platform.
Think Microsoft has a chance on the Web? I just can't see it. Not unless it gives up its OCD-derived attempt to control platforms. Am I wrong?