Yahoo Is Doomed To Marginalization (Oh, And Microsoft Too)

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It seems likely that Microsoft's bid for Yahoo is slipping further and further away from possibility. And, if so, what does this mean for the two firms? Growing irrelevance.
Monkey Boy has been hedging for the last week and a half. Microsoft had originally taken a hard line, and I suspect Ballmer's ego will not permit him to raise any bid by much. Microsoft's stock also doesn't look like the currency it was even a month ago. Yahoo, likewise, has been rather heel-digging. Microsoft, to some extent, bet on poor earnings by Yahoo. In fact, they were just good enough to keep the hope of Yahoo's independence afloat. Microsoft then faced its own earnings issues.
I must admit, I am not a Microsoft fan. (I'm typing this on a MacBook Pro, in fact). To my way of thinking Vista is just short of a disaster. The howls of protest that have risen as the phasing out of Windows XP approaches are somewhat remarkable, and somewhat predictable. Microsoft has become unwieldy and rudderless. Their unbridled rage at everything Google smacks of fear to me. Justified fear.
Yahoo, while prone to clever developments (I love Yahoo Pipes and Yahoo Finance is still quite useful), seems to be languishing and struggling to stay ahead of the curve.
A combination of the two would at least create some momentum. Then again, it would also distract the two firms. To me, this looks quite a lot like Blockbuster - Circuit City. An unmitigated disaster if consummated. Slow, blood draining death if not.
We'll see.