There's an upside and a downside to this possible merger that isn't mentioned much in the press, which would affect us little guys.
It seems that many people inside these companies on both sides would bail if this happened, and the best among them would probably be right out front leading the exodus.
That means a) a bigger pool of available talent for other companies, and b) more competition from the companies these folks might start.
The link is dead but have read a few articles and commentary on it. I think that Microsoft is not only buying "product" but Yahoo!'s talent pool (eg. I am pretty impressed with the new Yahoo! mail). I remember that was one of the main reasons why Microsoft bought Groove.
I agree with ekanes that you may see a few people leaves after the acquisition to start their ventures. Tech nowadays is so fluid and dynamic that new ideas and ventures will always flourish.
For everybody on YC/Arc News at least, since these sites are obviously using Yahoo's technology. Does YC/Arc have a license from Yahoo to use this scheme?
It seems that many people inside these companies on both sides would bail if this happened, and the best among them would probably be right out front leading the exodus.
That means a) a bigger pool of available talent for other companies, and b) more competition from the companies these folks might start.