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nick carr and henry blodget both give pessimistic reviews of the merger for macro reasons. nick carr, writing in forbes: http://snurl.com/1yvsc "The proposed deal also means this: Scale is everything. "The Net has long been seen as a great leveler of playing fields, a system that diminishes the advantages of size and lets individuals and small businesses compete with giants. But that's turning out to be an illusion. What we've seen recently is that success on the Web requires the aggregation of vast quantities of content and traffic, the collection of enormous stores of data about users, and the brokering and distribution of billions of ads. "When it comes to Internet scale, Microsoft finds itself in the unusual position of playing catch-up. Google not only dominates search and advertising, but it has been investing many billions of dollars in building a network of massive online data centers. Those so-called server farms provide the processing muscle for all the new Web apps--and a big competitive advantage for Google. "Windows and Office will continue to be cash cows for Microsoft for many years. But they're yesterday's products. Microsoft knows that to succeed in the future, it has to expand its online operations fast. The rich offer for Yahoo! may be risky, but at this point Microsoft has more money than time." -=-=-=- blodget: http://snurl.com/1yvs9 "Steve Ballmer knows which products butter his bread. So does everyone else who works at Microsoft. Steve and Microsoft may also know that, somewhere down the road, Google and "cloud computing" threaten these products, but there's a difference between knowing that a competitor might eventually disrupt your business and actively disrupting it yourself. "Put differently, there is a fundamental difference between the way Google and Microsoft approach the Internet: " * Google wants to use the Internet to build a huge business (and, in the process, kill Microsoft--a mission that may end up becoming an Ahab-like obsession) " * Microsoft wants to use the Internet to protect its already huge Windows and Office businesses. "One strategy is offensive, the other defensive. At Google, every exciting new idea that undermines Microsoft's core business will be rushed into production. At Microsoft, every exciting new idea that undermines Microsoft's core business will be killed (or, at least, delayed). "