Even if approved, the acquisition will take Microsoft time to digest. The two companies' global sprawl, different corporate culture and significant structural and operational overlap are all likely hurdles. There is no guarantee of success. Another big media merger, AOL's US$164 billion purchase of Time Warner in 2000, led to a US$54 billion write- off. Nevertheless, Microsoft is no stranger to playing catch-up. Then CEO Bill Gates, having missed the first wavelet of the Internet tsunami in the early to mid-1990s, quickly spurred his people to take on and defeat Netscape in the browser war. Microsoft could yet come from behind to overtake Google in the search-ad race. Its offer to Yahoo! - at more than 60 per cent over the share price - is obviously meant not to be refused. Why such determination - desperation even? Essentially because, for Web giants, it's eat or be eaten.

Microsoft could again leverage its dominant software position, this time with Yahoo! search and other portal services, into an overwhelming competitive advantage. It could undermine Google by making access to these highly advertisable services, along with upcoming mobile-related and other interactive digital media, the default in Windows operating systems or Internet Explorer. Requiring only a single log-in, that access would make them the most convenient, if not the best, applications for almost all users. Indeed, a similar move by Google - offering conveniently portable word processing, spreadsheet and presentation capabilities online - already threatens to erode conventional Microsoft software sales. Giantism by itself does not necessarily inhibit innovation. Microhoo/Yahsoft! could even enhance it while squeezing efficiency out of size. It is only when giantism knocks out competing giants that the Web community should start worrying.