It looks like we have a Microsoft-Yahoo deal. If you smack two amorous giants together enough times, I guess you are going to get a love child.
I doubt Google has much to fear from the laggard that likely will result. Just as two wrongs don't make a right, combining two struggling organizations is unlikely to fix dysfunction.
I hope I am wrong. If the deal provides focus rather than distractions, if it allows both organizations to rapidly iterate on, develop, and deploy products people actually want, it has some chance of succeeding.
But, as separate groups, both organizations barely can control the internal squabbling of hordes of product managers, "none f-ing getting anything done", as Carol Bartz colorfully put it. Combined, someone will have to keep these beasts from pulling on and tripping over each other while they desperately pursue the leader of the pack.
Update: Excellent commentary on the deal by Danny Sullivan, Jason Calacanis, and Saul Hansell.