A lot of folks figure MSFT wants the eyeballs, ability to generate a profit on the web.  Well thats the obvious short story.  What was obvious to me the moment i heard it, was MSFT was going to be able to fulfill a goal of thiers, which they have stated, in the only way I think they can....

MSFT has entered the era of realizing cloud-computing (thier term) or grid computing.  There are a few companies out there that have massive scale data centers - Google, Yahoo, AOL, Ebay, Amazon.  A few others, not many.  And when I was at a MSFT developers conference this past fall, they announced they were going to build many of these massive data centers to join this business - and become a modern day telco.

Only, they are waay late to this game.  Nothing Scales. (tm)  How you heat, cool, layout cables - this is all very specialized at this scale - how you setup install, de-rack, maintain a massive data center (lets not forget all the cool things about redundant cluster computing with fail in place components, etc.  Just try to build one of these suckers - )

So how can they catch up?  Buy Yahoo.  The street will make them pay for the online ad revenue, a profitable business model, a web portal and the number of yahooligan eyeballs, etc.

But the street won't charge the premium its worth the MSFT - how to build, run, massive scale computing, which there will be 3-5 (rule of 3) players in the coming years, and MSFT needs to be one.  Or they will be bought by one.

So they want to buy Yahoo.  So far its not been working, but I now realize how they plan to get into massive scale computing - which I didn't believe they could....