What is Yahoo! real intention when they decided not to take Microsoft's "generous" offer? Some analysts say that Yahoo! is only wish to raise Microsoft bid price to their demand, they even went to see AOL & Google to start sending messages to Microsoft that they have other options. Yahoo! certainly is playing the correct cards right now, after Microsoft announced their bid to take over Yahoo!, Yahoo!'s stock price went up till now while Microsoft's went the other way. But another sign of Yahoo! talks with AOL & Google mean something else; Yahoo! is thinking just exactly what Microsoft is thinking to fight Google's ever growing influence in internet services.
Yahoo! certainly have reach their limit to develop newer innovative and competing internet services, while Microsoft is clueless on what to do to compete with Google (please read my previous post about their fights). For quick instance: nowadays I hardly have friends that use Yahoo! Mail anymore, all of them are converting into Gmail already (maybe you too?) If they join forces together, they can match Google's prowess and maybe even take over internet services for their own. Indeed it'll take longer time when they actually did the join-forces team-mate, both side have their own organisation's structure/hierarchy that need to be synchronized before they can move on together. We're talking roughly around 2-3 years of an actual result after (if it's going to happen) the merger, so Steve Balmer-Microsoft is seeing long way ahead of the future of internet market. What will be and where Microsoft's stand against growing Google empire, the once strong old empire could be shadowed by the new one in the matter of years to come.
Personally I'd like to see competition between Google, Microsoft & Yahoo! Because with others trying to gain customers with their products/services, the others will do the same with better ones (in theory). We all know what happened back then when Intel reign as a single company that dominate processor chip market, before AMD arrived. It'd be best for end users, like you & me, to have those big boys compete each other. Better products/services at lower price can be achieved, just look at Microsoft Office, because no other dominant same product in that market; Microsoft can put high tag price for every Office Suites. While the alternative open source office aplications are not yet at the same level with Office Suites, relying only on freelance programmers to fix & develop it is taking way too long to catch up.(blogged with my Treo 750v)