I don't see how this could be bad news if your strategy is sustainable. As in, you won't die a swift death if you don't get acquired YESTERDAY.
I also don't see why you'd choose an unsustainable strategy. Though it seems lots of companies choose the "lottery" option (all-or-nothing make-a-quick-buck-fast).
Like the article says, a LOT of startups are creating features and not products so they'll get in trouble first. Sure, if you have a sustainable business model and can execute, you'll be OK. Problem is startups that don't have a lot of funding and don't have enough revenue to get cash flow positive.
I think it's bad for startups, not b/c it's one less company buying startups, but b/c when MS buys Yahoo it will hurt/kill the open source projects that Yahoo is sponsoring
That's exactly what I'm afraid of. Bye bye YUI tools...