The collapse of the Microsoft-Yahoo deal is the best thing that could have happened to the rest of us. And from all accounts, the Alien really is dead.

Consider it from the perspective of Microsoft customers. Even if you're one of those who believe that Excel is the last innovative product Microsoft has introduced, you'd probably agree that Microsoft could usefully spend its time improving its business offerings instead of getting distracted by a hostile bid, eventual takeover, and figuring out what to do with the myriad product overlaps. Joe Wilcox has a useful list of those right here.

And as Marshall Kirkpatrick wrote on ReadWriteWeb, our favorite Yahoo applications are safe--for now.

It would be great to see Yahoo! put its own money where its mouth is and really leverage the innovation that much of its rank and file are clearly big believers in. The company has incredible opportunities to move away from the Hollywood-centric paradigm advanced by former CEO Terry Semel. If any large player could monetize web and standards based technology in an innovative way, it could well be Yahoo!

Microsoft can move forward on its own products, making Vista business-capable, adding capabilities to SharePoint, improving its Dynamics CRM--and in general building out its software plus services offerings. And it can begin to straighten out the brand confusion that has dogged Live and many other products and services Microsoft has rolled out over the years.

Microsoft doesn't even have to give up on social networks; as Henry Blodget points out, buying Facebook wouldn't be out of the question--even if Joe Wilcox (once again, and he's usually right) thinks it's highly unlikely.

It can even think about adding social components to existing products, like Outlook, by making smaller acquisitions that could actually fit its current product set.

Meanwhile, an independent Yahoo will also keep both Microsoft and Google on their toes; Yahoo has thrown a lot of spaghetti at the wall lately, and given its recent history, which is long on ideas and short on execution, none of it may stick. But as long as it's thrashing around, Google and Microsoft will have to pay attention.

By the way, some of Yahoo's new initiatives actually show promise, particularly in the mobile space.

And its social platform could be a force to be reckoned with. Business is only beginning to learn how to use social networks for collaboration, communication and marketing, so it's far from too late for Yahoo to get in the game.

But the upshot is that a Yahoo-Microsoft acquisition would have had three of the largest companies in our world focused on their own issues instead of on what really matters, which is making better products for the rest of us.

Now, they can get back to the business of serving business.