Perhaps it's inevitable that the most visible executive at Microsoft is the target of all kinds of vitriol and insult, regardless of whether it's deserved or not. As Bill Gates is winding down his involvement with the company, Steve Ballmer is taking his place as Chief Lightning Rod for Microsoft. And boy-oh-boy, this failed Yahoo deal has really brought out the Ballmer-busters.As Fake Steve Jobs observed back in February, Ballmer seems too smart to think that a Microsoft-Yahoo merger would create a company that could challenge Google. He's seen 25 years of Microsoft's PC industry competitors trying all kinds of combinations, and none of them ever beat Microsoft. He had to know a merger was a bad idea.

The Internet is the one place where Microsoft is coming from far behind. After a decade of trying, it is still a distant third behind Yahoo and desperately looking for a way to quickly catch up to Google. Microsoft's board of directors may be putting the pressure on Ballmer to find a solution for this Internet problem, and fast. So perhaps it wasn't Ballmer's idea to try the merger at all, or at least not an idea that had his whole-hearted support. It didn't bother him to walk away when the price tag got too high, it may actually have been a relief.

So what has been accomplished? That's the mystery. Microsoft hasn't improved its Internet strategy. Google is still the undisputed No. 1. Yahoo was distracted by the whole affair, and already has lost staffers who despaired at becoming part of the Microsoft conglomerate. So I suppose Microsoft benefited by weakening Yahoo, but Yahoo wasn't really the target. Even in its weakened state, Yahoo is still ahead of Microsoft in just about every Internet category.

Yahoo stock will droop as shareholders see there is no Microsoft payday at the end of the rainbow. They may revolt against Jerry Yang and the Yahoo board of directors, after realizing that the $33-ish Microsoft offer was a lot higher than any price they're likely to see for several years. So who knows, Yahoo might come back to Microsoft in six to 12 months and beg for another chance at matrimony, even at a lower price.

Perhaps that was Ballmer's goal all along, to get a reasonable price. Ballmer supposedly told Microsoft employees, "I know exactly what Yahoo is worth and I'm not paying one dime more." There are opportunity costs to consider, however. If Microsoft really thought Yahoo was the key to a successful attack against Google, it could have had it today for just 5% more than its previous offer. Six to 12 months from now, Yahoo may be cheaper, but it most likely will be in rougher shape, too. And of course, Google is likely to be stronger.

Maybe the best thing this has done for Microsoft is make it realize that there's no magic bullet. Yahoo's absorption was going to be expensive, and the work to trim overlapping services would have been painful. So now it needs to either build out its own services or acquire small companies looking for cash to build out great ideas. Ballmer's adrenalin should be pumping now, and he needs to kick some serious butt in the online group or Microsoft will remain a third-rate Internet power.