I can see we've already had a long debate on this topic :) However, I'd like to offer my own views, based on the (rather heated) debate that occured on our own blog. The gist is as follows:1) Chrome failed to make an impact as a browser, and with the numbers that Windows 7 is showing at the moment, combined with Chrome OSs designtated market of netbooks, Chrome OS isn't expected to make a significant dent in the OS market.
2) However, given how the consumer profile of google and gmail users is younger and affluent, gmail is expected to grow at breakneck speed and overtake yahoo as the biggest free mail service in the world in the next couple of years (@Rahi: actually, a lot of people still use yahoo exclusively, but these are the older users and will phase out in another decade)
3) This deal is directed mostly towards the european markets, and shouldn't have a lot of impact on India market as of yet, however, with Windows 7 around the corner and the fact that Bing features heavily in almost all its web based applications and suites, Google might face some stiff competition.
4) IE6 was a lousy browser (but thats just common knowledge anyways
)I believe that this move will give Microsoft and Yahoo the strategic depth to combat Google. This may not necessarily be a bad thing, seeing how heavily Windows 7 features web compatible applications, its clear the Microsoft is steadily shifting to newer perspectives, and hey, no matter who wins or loses between them, in the end, the real winner will always be the consumer, namely us :)