Some quick thoughts on the proposed acquisition:
1. Probably a great opportunity for Yahoo! shareholders -- a 62% premium for a structurally challenged company is going to be hard to decline.
2. Not a happy development for Google -- Google can attempt to put a positive spin on it, but ultimately MSFT + YHOO would represent a direct response to Google's expansive ambition and momentum. Between Google's disappointing earnings announcement, uncertainty about Google's intentions/commitments re the airwave auction, and the possible MSFT + YHOO equation, I expect there will be significant stock market volatility today...
3. Lots of subtly fascinating dimensions, e.g., what could happen to Zimbra, as part of Microsoft, and how some of the tech visionaries at Yahoo (e.g., Scott Dietzen of CMU/Transarc/Weblogic/BEA/Zimbra fame) could help to advance Microsoft's overall strategy.