• D: All Things Digital, Thursday, May 1, 2008 11 AM

Microsoft is having a company-wide meeting today in which employees get to vet their concerns about a potential Yahoo acquisition. Why should they care? As with any merger, many jobs could be on the line, especially after Microsoft set up a $1.5 billion retention package to hold onto Yahoo employees should the merger go through. If it does, heads are certain to roll at Microsoft's online services division, and many Yahoo execs are certain to leave.

Another reason tensions are high is a lack of confidence that the proposed deal would be a success. "Reasons just keep piling on as to why we should not buy Yahoo," one mid-level Microsoft employee told Kara Swisher. "It's a bet a lot of people are getting more nervous about." Swisher points out that Microsoft built its enormous fortune on the back of software, not online advertising, causing many old-time employees to question the company's dramatic shift in strategy. "We need to focus on Vista and its problems and making sure we continue to innovate in what we do best," said another.

Meanwhile, some of the most vocal protestations have come from Microsoft's engineers and programmers, who worry that Google might surge ahead with their Windows-competing Web-based services while Microsoft is busy trying to integrate its platform with Yahoo's. Then there's the problem of the inevitable Yahoo exodus: "Yahoo's leadership is obviously not going to stay and they have had trouble managing its business anyway and so has Microsoft," said another employee. "So who is really able to lead something this big?"

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