Erick Schonfeld of Techcrunch writes a good follow up to the initial news here.

Its a good article but I would make one point about the chart he publishes.  Comparing the combined revenue/expenses/etc... of Yahoo and Microsoft to that of Google is not a fair comparison.  Google is playing in a lot of Microsoft areas (office software for example) but they aren't really competing.  The bulk of their effort is still focused on a few key areas (all having to deal with Search and Adsense)

Microsoft on the other hand (and even Yahoo to an extent) is spreading their money much thinner because they are seriously competing in tons of different areas.  So to say that Microsoft and Yahoo would have Revenues of $65B vs Google's $16.6B is a little misleading when Google is probably spending twice as much on its cash cows (which also happen to be exactly what Microsoft is targeting with this acquisition)

For the record, Mr. Schonfeld makes a similar point in the post but it sort of gets lost in another point so I wanted to draw attention to it before linking to the post.