Big companies can innovate, but the whole MS / Yahoo debacle seems to be about a clash of titans in entrenched spaces. MS has a bigger warchest than Google and

Big companies can innovate, but the whole MS / Yahoo debacle seems to be about a clash of titans in entrenched spaces. MS has a bigger warchest than Google and with the combined MS / Yahoo they'd have more eyes too. They could run that segment of their market at a loss for a while to try to steal some of Adwords' thunder. Think of MS's entrance into the game console or MP3 player markets. While, again, I don't think it's a great strategy to plow into entrenched markets like that, compared to creating new markets (a la your Amazon example), MS has certainly demonstrated a willingness to do so. In fact, I'd say that's almost they corporate modus operandi; almost their complete history has been bulldozing their way into markets using sheer brawn.