M&A, MIcrosoft and Yahoo....

Just wrote this on techdirt, but thought it was relevant enough to post here - vis a vis Yahoo/Microsoft merger.

At the end of a big growth cycle there is always an increase in M&A activity as the cash-rich old guard, if they are smart and quick, buy their way back into relevancy through quick strategic M&A. More importantly, with the buzz in tech coming back, those with $$$ are worried that prices will go up as the economy improves and/or in case a bubble 2.0 develops. Better to buy now, especially if it's accretive.

Microsoft, missed the boat with the Internet and specifically the portal business. Frankly have not had the success with MSN which they should have (failing to ever really capitalize on being the default setting on their browser.) they also do not have a really successful ad business yet.

But what this is really about is the next generation desktop, which will be distributed via browser. Google has it, Sun has it, Yahoo + Microsoft might have it; though neither has really succeeded in developing this separately.

The days of the dominance and importance of the OS are waning and MSOFT needs to protect its flank.