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There was an article a couple of years ago that looked into the history of one of the patents. Patent 6,269,361 that covers bid for advertisement placement in search results was developed by a company named Overture. Gates wanted it, but Yahoo bought the company in '03 for $1.63 billion. Microsoft started licensing the patent from Yahoo. There was also a settlement between Google and Yahoo over the patent. This could be the key that Microsoft wants to go after Google's ad words and keep any other competitors out of the market.

You say Google will come crashing down, yet you also say no one will "ever" be as good in search. So I ask again, what mechanism or event do you foresee in your crystal ball to bring about such an unlikely crash?

1. Microsoft wears down Yahoo's board, purchases Yahoo, and more importantly, all of its search engine advertisement revenue patents
2. Microsoft, upon examining Yahoo's internal documents, reveals that Google had grossly underpaid Yahoo for use of US patent 6269361, the core of the Google PageRank system. Although news reports indicate that $330 million in stock was exchanged, both Yahoo and Google's financial reports only record $30 million because of how the stock was recorded. Only Yahoo and Google have the text of their agreements... and whoever buys Yahoo will know.
3. Any kind of financial shinanigans on Google's point will pop the stock bubble (which is already down 2% today to Oct 2006 price levels), and adding the very slow growth in advertisement revenue over the last few quarters, combined with added patent payments, this would be the catalyst for investors to pull out.
4. The other path is that owning the patent allows Microsoft to freely develop their Live search, which has been crippled because of Yahoo's resistance to licence the ad-revenue patent to Microsoft. This would finally allow Microsoft to develop its search engine to compete on-par with Google's main source of revenue. Microsoft surely will only do an adequate job, but since the market share is out of balance in Google's favor, any additional player in the search revenue market can only hurt their bottom line.
5. With the collapse of Google's stock, employees disperse for other companies (like the Cuil engineers), draining their talent pool, and they are done.

The terms of Google's out-of-court settlement with Yahoo are unclear http://www.techuser.net/microsoft-yahoo.html, but they may well leave some leverage over Google in the patent.

The otherwise farfetched-but-partially-plausible article that Slashdot ran last week had one thing very right: there's no logical reason to believe, based on YHOO's performance over the year prior to Microsoft's first offer, that $19 was anything but a temporary low blip before Microsoft swooped in like a vulture at just the right moment to make their takeover bid look more impressive.

The average YHOO stock price over the preceding year was (eyeballing here) roughly $27 per share, with a general slight downward trend but still high enough that a linear fit would still predict a price around $23-$25 (again, eyeballing) at the time of Microsoft's first public offer. When you compare YHOO to NASDAQ over that same year, it becomes obvious that the timing of YHOO's ups and downs had much more to do with volatility and emotions on NASDAQ (and the larger oil-credit-bear global stock market) than it did with news regarding Yahoo itself. The buys and sells, modulo the bump-and-slump after the layoff announcement on Jan 21, clearly aren't due to new information about Yahoo's fundamentals as a company, so it seems fairly reasonable that the $19 share price (which lasted for a mere 2 days) wouldn't have lasted any longer than the wait for the next ephemeral upward bump in the NASDAQ. (Not that YHOO would've outperformed NASDAQ, necessarily, but it quite likely would've be back to the $21-$23 range soon enough, and possibly higher.)

When you combine this information, it makes Microsoft's $31 deal look much more like a lowball number that it does at first glance, and makes it quite clear that Yahoo's board was reasonable to perceive it as such, even if it turns out they were wrong in the final analysis.

In addition, for most of the last 5 years, YHOO has traded $25 or higher, and sometimes as high as $40. Traders who bought YHOO as a long-term tech investment when it was $25 or higher -- likely the majority of YHOO shareholders -- would've been treated to a much less impressive return in the MS deal, or even a loss depending on the original buy price. For them, the MS deal could easily be beaten by simple share appreciation over 5 to 10 years if Yahoo just manages to get its house in order, even if it's merely to be a more solid runner-up behind Google. Yahoo is, after all, #2 overall and #1 in certain markets when it comes to search, and they own Overture, the only company that's been doing online text ad auctions for longer than Google, so they clearly have the potential for a turnaround. This whole Microsoft fiasco might be the kick in the pants they needed to make it actually happen.

So, in the long analysis for all those investors who bought before YHOO reached $19, it's not even remotely a guarantee that they would've been happy with Microsoft's $31 numbers, or that they're upset the Microsoft deal fell through on the terms that it did. Anyone who says "I poached YHOO at $19 and got ripped off because I didn't get my 63% return" is a moron short-term gambler who deserves to get burned.

"In July 2001, the US patent office granted Overture US patent number 6,269,361. Also known as the '361 patent, it covered the basic paid-search bid-for-placement advertising model"

"In July 2003 Yahoo acquired Overture in a mostly stock deal valued at $1.63 billion"

"The peculiar thing about Microsoft Yahoo negotiations is Microsoft's insistence on owning/co-owning Yahoo's paid-search assets "

"Microsoft believes that by being clever about the deal terms Microsoft can practically get Yahoo's big fish patent licensee to fully reimburse Microsoft for whatever Microsoft pays for Yahoo's paid search assets"

"So, who is Yahoo's big fish patent licensee .. By simple elimination it has to be Google "

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So basically Microsoft gets Google to finance the Yahoo takeover and then gets Google to pay MS revenue out of its (GOOG) own paid search business.. PURR of EVIL ... :)

It is incorrect that Mindstorms were "unsuccessful". They were simply out of Lego's plans for quite a while, a good article with speculation about this is here: http://www.techuser.net/lego.html .

Fortunatelly for the greatest toy ever, Lego came to their senses! Well, apart from their design team that gave us the ipod look!

A) They filed a patent but it isn't yet awarded

B) Yahoo owns the '361 patent which covers a key component of Adsense (bid for placement), and the settlement pretty much gives Yahoo free reign of Google's patent portfolio.