Unless you've been living under a rock, you probably already heard about the MS offer to acquire Yahoo. While it is Microsoft who is poised to acquire Yahoo (Microhoo) it seems that it is part of the greater move of Microsoft towards moving into Internet based service - all the "live" initiatives along with the "Software + Services" moniker.
I tend to agree with Nicholas Carr who recently published an article in the Financial Times where he talks about how Gates leaving MS marks the end of the desktop era. In fact looking for the above mentioned reference I saw another article Carr wrote for Forbes where he says it even more bluntly

"One important message is this: Software is becoming a media business. The Net is not only a universal medium, a distribution channel for words, sounds and images. It is also turning into a universal computer--the machine we use to run software and store data."

You might also want to check out  a presentation a few of my colleagues  and myself has prepared about half a year ago where we talk about the same phenomena - Called the "Future of Home Computing" (5.5Mb).


In this sense the Microsoft - Yahoo merger (if it will follow through) will result in Yahoosoft a company which is focused more on the internet aspects rather than the more traditional (some would say legacy) desktop aspects of Microsoft.

It is also interesting to note in this sense that while winning the web search (and the related ad-revenue) is something Microsoft is very interested in.  The eyes of Microsoft (and Google for that matter) are on the next battlefield - mobile search. While there are something like 305 Million broadband subscribers worldwide the number of mobile phones sold just in the last quarter of 2007 was larger (334 Millions) and the total of mobile phones worldwide is in the billions... An added bonus here is that Google is yet to take over this market (thought it of course moving in that direction with things like the android platform and location based search and services)