"Holy crap" was the first thing that came to mind this morning when I read the news about Microsoft's bid for Yahoo. Then I immediately thought about Flickr, del.icio.us, and Hadoop and what this would mean for them. Flickr already went through a painful migration to Yahoo's login service, would that have to be repeated when they move to Passport? Fortunately, del.icio.us has come out mostly unscathed, so I'm not too worried about it. Hadoop is open source with a large number of contributors, but losing the Yahoo employees would definitely slow progress. Pig would also take a big hit.
To be honest, I don't see how this could possibly work. Integrating two companies of this size would be a nightmare. Have we learned nothing from eBay/PayPal or AOL/TW? From my outsider perspective, it seems the two companies have fundamental cultural differences. Yahoo is a fairly large contributor to open source and seems to support web standards. Microsoft is the anti-thesis of web standards. Does Microsoft expect Yahoo to move away from their current operating systems (which I assume are some sort of unix) to Windows? That worked oh so well for Hotmail. I believe any value Microsoft sees in Yahoo would probably be destroyed as part of the transition (even if it is just the customer base).
Finally, Microsoft is still having branding issues with their internet properties (MSN Hotmail redirects me to mail.live.com… WTF?) and now they want to throw Yahoo into the mix? Yikes.