I've always admired Yahoo. Not just for what they provide as services to hundreds of millions of people worldwide. Their leaders have shown abundant commitment to causes of social and economic improvement, justice and other noble purposes. You have to like a company where one multi-billionaire co-founder shows up every day to work in the company's operations. And the other returned as CEO, with all kinds of personal reputation risk from so doing, and is clearly committed to doing right by their various stakeholder groups.
Sometimes deals come along, that even a strong company like Yahoo, have to take. This is especially true when the deal logic is bullet-proof, and there aren't viable alternative options. Google can't buy Yahoo due to anti-trust obstacles. Advertisers, and possibly consumers, would be served well if Google were forced to perform and evolve with at least one strong competitor nipping at their heels. Today, Microsoft is losing to Google. Yahoo is losing to Google. Putting Microsoft and Yahoo together would be better for Microsoft, better for Yahoo, better for advertisers, better for consumers, and in the long run better for Google (although Google can be forgiven for not seeing that right now).
This is not the Microsoft of old, who acted (and felt) so superior that any company acquired could expect to be closed down, assimilated fully into Microsoft, or emasculated. Microsoft has eaten a lot of humble pie over the past few years. By many accounts, they are better, smarter, friendlier partners, suppliers, and acquirors. They are likely to embrace Yahoo as a desirable, positive infusion into Microsoft to make Microsoft better for customers, investors, and employees.
Microsoft has repeatedly dropped the ball as a service operator, which could be their Achilles heel as Software-as-a-Service and Cloud Computing proliferate. Yahoo, for all of their woes, is known throughout the industry as a very strong service operator and innovator. I expect to see Yahoo people, processes, and operating models taking over activities in MSN, Hotmail, and many of Microsoft's recently announced SaaS initiatives. I believe Microsoft investors, customers, and business partners will apply heavy pressure to see early evidence of this approach to integrations rather than Microsoft running roughshod over Yahoo.
We'll know soon enough, methinks. Yang needs to procure from Microsoft a final price adjustment and perhaps a few concessions on post-merger org structure and people roles, so he can ride into Yahoo HQ on a white horse and be the savior he deserves to be.