Merrill Lynch seems to think Microsoft should by Yahoo in order to make itself competitive with uber-company  Google.  I’ll admit they make valid points.  Combining the assets of the largest software company in the world with the second largest search engine (with room for growth) and you have a monster on your hands.  However, I doubt it would be as easy to combine these two giants as Merill Lynch seems to think.  First, with Microsoft’s barely in the past anti-trust issues would the SEC approve the merger — even with a Republican administration?  Would Yahoo want to be absorbed into the Microsoft behemoth?  Look at AOL/Time Warner.  The merger nearly ruined both companies, AOL has never been the same.  Granted, Microsoft and Yahoo are more compatible companies.  Life would certainly be interesting with a Microsoft/Yahoo merger, especially with branding.  Every PC computer would come pre-installed with Yahoo as the default search engine.  They could easily dominate Google.