Email, Microsoft, Yahoo

There is one way that a Microsoft - Yahoo merger makes very important sense, and that area has as its base email. Yahoo mail, according to Wikipedia, has 260 million users. Microsoft Hotmail looks to have 280 million users.

Putting aside all the chatter about search, display ads and content (total distraction that falls right into Google's hands), these are hugely important assets.

Email is a base level consumer activity, and more importantly can be a jumping off point for related personal utility and organizational applications.

I'm thinking Microsoft and Yahoo should be totally focused on utilizing this combined base as a web based email start page -- 500mm plus users -- then layer on great end user applications. Add in delicious for web links (e.g., email links right from delicious). Integrate Flickr for photos (e.g., download .jpg attachments right into Flickr). Build in a publishing service, acquire Six Apart or Wordpress or even better Tumblr! And integrate them all in a way that make sense from the perspective of consumer web-based utilities and publishing, ensuring that the design enhances the functionality and keeping things simple. Then add document storage and sharing, and online word processing and spreadsheet apps. The list over time can grow, lots of fun whiteboarding this out can be done here. Numerous ways to monetize also.

What you just might end up with is a great personal self publishing platform, all tied together. Something unique, that no one else has. You don't necessarily need to be the best at what you do, but you do need to be the only one who does what you do.