In moving to buy Yahoo, Microsoft may be firing the final shot of yesterday’s war. That one was over Internet search advertising, a booming category in which both Microsoft and Yahoo were humble and distant also-rans behind Google. Microsoft may see Yahoo as its last best chance to catch up. But for all its size and ambition, the bid has not been greeted with enthusiasm. That may be because Silicon Valley favours bottom-up innovation instead of growth by acquisition. The region’s investment money and brain power are tuned to start-ups that can anticipate the next big thing rather than chase the last one.

And what will touch off the next battle? Maybe it will be a low-power microprocessor, code-named Silverthorne, that Intel plans to announce Monday. It is designed for a new wave of hand-held wireless devices that Silicon Valley hopes will touch off the next wave of software innovation.

Or maybe it will be something else entirely.

No one really knows, of course, but gambling on the future is the essence of Silicon Valley. Everyone chases the next big thing, knowing it could very well be the wrong thing. And those who guess wrong risk their survival. That is why front-runners do not stay front-runners for long. Many big names of the 1980s — Commodore, Tandem, Digital Equipment and MicroPro — are in a graveyard shared by the highfliers of the 1990 — the At Home Network, Netscape and Infoseek, to name a few.

Now Yahoo, founded by Stanford graduate students who became media darlings and instant billionaires after an exhilarating initial public offering of stock, may be the next to disappear. And Yahoo, which is based in Sunnyvale, California, is only 13 years old.

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