"...this is a business where technology matters. It's a software problem. It's about engineering and R&D expertise and growing the capacity that is really critical to the success related to achieving scale."
Microsoft has spent over $20billion attempting to bring Gates' XML vision on to the internet... and that was three years ago. Since then they've not been able to deliver on that vision. Yahoo built Panama and attempted to make it work in 2006. Then, they had to rewrite it... and it still has no real usefulness within the company.
Where is the R&D strength in Microsoft or Yahoo now that major portions of MSFT brain-resources have left after the Vista fiascos and YHOO brain-resources have left over the past year.
What new brains will come in to solve the problems 5 years of R&D and over $20billion spent for nothing could not achieve?
What's holding Microsoft back on building an effective Longhorn? (One that won't corrupt shared files)
What's kept Yahoo from being able to adapt advertizing to MySpace effectively.
Just having eyeballs means nothing if you don't have the technology to bring services to the eyeballs. Why don't we have a Microsoft internet interoperation that can be pointed to between their proprietary products and the public internet (not private testers)? Let's see it. Let's see Microsoft's internet solutions in the United States in public.
Let's see Yahoo's web applications. Where are they?