Microsoft 0, Yahoo 1

So goes the first round in what is surely going to be a 15-round slugfest. I for one was glad to see the Bellevue brawler knocked back into his corner for a change. They are so used to their pursuits falling gratefully into their arms, swooning to be the momentary affection of the ultimate beach bully.

Yes, Yahoo may yet concede, given the pressure from their shareholders, but I think the Internet is going to continue to be a more interesting place with companies like Yahoo and Google running around. After all, do you really want ads popping up in your Word or Excel docs? How tightly do you think they will integrate their ad services into their next OS? Yahoo has been the little upstart since the beginning, though now they are like the teenage Macaulay Culkin--big, gangly, and not so cute anymore. Investors have been off on them for a while, seeing Google as the clear winner in the online ad wars.

I'd like to see Google and Yahoo work something out. Their cultures seem much more akin to each other: one the dorm-room brainstorm of Jerry Yang, and the other with the motto "don’t be evil."

What can MS do on their own? Still plenty. They may have been rebuffed in this round, but I wouldn’t count them out. If they don’t take down Yahoo eventually, they will figure out a way to come back. I've learned to never count Microsoft down and out. I could see a free version of Office supported by ads... or Microsoft buying a major network or studio. They could probably buy most of Hollywood with their cash stash. It's still early in this game and it's anyone's race, but I wouldn't bet against Microsoft.

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