First
Facebook's Slap in the face and now
this? Definitely seems like MS is gathering up some resources doesnt it?Scobleizer makes some interesting points around all this.
Even though MS is trailing behind Yahoo and Google in search if
MicroHoo goes through then MS's vested interest in Facebook becomes VERY interesting. I read another article recently ( ill try to dig up the link later) that proposed away for a company like MircoHoo or some variant of to oust Google as the search King.
Remember that search is first and foremost about relevance. If the users stop finding what they want on your search engine... it wont be long before you become AltaVista of the search grave yard. The article pointed out that if another search giant decided to poach the top 1% of search results for the top 25% of keyword searches things can change quite drastically. By offering these publishers some sort of an incentive to remove themselves from Google's indexing ( and assuming they bite..which they wouldnt have much reason to not right?), Google would take a significant hit on revenue alone.
Of course this is all here say and only someone like MicroHoo could possibly pull it off but it definitely plays into the hands of Microsofts buy everything mentality doesnt it?
If mircosoft were to either purchase or create some joint venture with yahoo search and then subsequently buy facebook the hand down a similar path. If google cannot access information within the Facebook network but MicrHoo could relavence for search all of sudden becomes VERY important.

Atleast at face value this doesnt seem like an entirely new concept to me. Think AOL back in the early 90s. Basically a walled garden that everyone couldnt wait to break out of because there was SO much more to the net than the pretty little world AOL showed us. What MS is trying to do here is create that same walled garden but claim the entire web.
The last decade was search and we have already started on the next big thing which is social networks. Combining the two is definitely where everyone knows we need to go ( case in point: myspace data portability, google friend connect, facebook connect, yahoo search monkey). Everyone is gearing up for the war... fast forward 5 years and i guarantee you will be surprised by the causalities.