After Microsoft failed to woo Yahoo! folks in order to acquire and integrate Yahoo! technologies with those of  their own, some have claimed that Steve will invest the money he had set aside for Yahoo! in search technologies that could allow Microsoft to challenge and dethrone Google as the leader of the pack. Now that is all exciting but who really believes that Microsoft will actually do that. Will Microsoft buy a few small companies to fill some small gaps? Absolutely. But at this point, I think even Microsoft doesn’t believe that they have a chance to effectively challenge Google without Yahoo!

Microsoft has not really been a front runner in industries that its involved in. Microsoft loves to play catch up, and that is what it has done for the past few years in the gaming industry, the search industry, and a few others. So we can be sure that Microsoft will not come up with a revolutionary search technology that would upstage Google. It’s not as if Microsoft has been gaining a lot of ground on the top two anyway, so the most logical thing for Microsoft will be to wait for Yahoo! to stumble again and come back to the table with another offer.

For Yahoo! it’s pretty much the last chance right now. Jerry Yang can’t fail in his mission to bring value to Yahoo! shareholders or he will be forced out. Yahoo! shareholders are very nervous these days, and who knows if they can resist another offer buy Microsoft (not that they did the first time).