This was expected, but I reckon Yahoo! is only delaying the inevitable.
Here's what bothers me the most. Yahoo! servers run on FreeBSD, a rock-solid flavour of Unix. Well, Hotmail did too, until Microsoft gobbled it and changed it to Windows. It's another matter that the transition didn't happen overnight. If Microsoft devours Yahoo!, there's little reason to believe that FreeBSD will continue to have a free run. New services will be launched on Windows and old ones, when upgraded, will inch away from FreeBSD.
The Java guys in Yahoo! would feel like an endangered species, mass exodus would ensue and Microsoft would be hard-pressed to replace them. Other employees, disgruntled by the identity crisis, would follow suit.
Of course, this is just one of the possible scenarios and I hope it never happens. I have nothing against Microsoft per se, but I fear Yahoo! wouldn't be Yahoo! anymore if Microsoft owns it. The Redmond giant should begin to embrace the heterogeneity of the Internet before others cut it to size.
Addendum: I met an acquaintance a few days ago who recently switched to Yahoo!.