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First up, obviously, is an attempt to block the deal by convincing regulators that it's uncompetitive. Microsoft may have some traction here: when Google and Yahoo did a dry run of this deal earlier this spring, the U.S. Department of Justice looked into it--in particular a phone call from Google CEO Eric Schmidt to Yahoo CEO Jerry Yang in which Schmidt offered to help defend against Microsoft's bid for the company. We don't see how the deal could possibly warrant government intervention--it's not the government's fault that Microsoft's Internet business has been sucking wind for 13 years--but that doesn't mean Microsoft's legal army won't be able to slow it down or scuttle it.

Beyond that, what's Ballmer's plan B? The WSJ says Wall Street is expecting a full lay-out of Microsoft's post-Yahoo strategy at its annual meeting of financial analysts July 24. Among the rumored options:

• A deal with another non-player in Internet search like Ask.com
• Buy social news site Digg (Microsoft already serves Digg's ads), which could lead to another battle with Google.
  
• An acquisition of Facebook (which also has an ad deal with Microsoft), as a platform for an operating system for the Web

All predictable speculation--none of which will matter. Facebook isn't going to sell to Microsoft unless Microsoft offers it an absolute king's ransom ($20 billion +, in our opinion). A Digg acquisition wouldn't move the needle. An Ask acquisition wouldn't change anything, either: It would only increase Microsoft's share of the US search market from 9% to 14%. Big whoop.

Back to the drawing board...

See Also: Former Fed Regulator: Yahoo-Google Search Deal To Face "Serious Antitrust Scrutiny"
All Right, Yahoo Bashers, Put a Sock In It: This Is a Good Deal
Yahoo Cost Freeze Means Business Likely Weak--Microsoft Just Waiting To Buy Carcass?