Dan Frommer of Silicon Alley has noteworthy a post on start ups merging with each other.  It can't make sense for many start ups to merge with each other.  They are already stretched just keeping themselves going and executing on their own plans.  So, they are unlikely to have the bandwidth to take on a second project.  Hence there will be few synergies and fewer savings.  Unless the two start ups are more fundable when put together than they are apart, something is going to get mothballed.  This strategy suggests that one (maybe both) parties can't find a buyer, even in a distress sale.  Dan Frommer notes that Google "is waiting to buy companies until prices come down."  I wonder if  this strategy isn't just aimed at preserving or enhancing some value for a distress sale in the coming months.  if it is, I don't think we will see a lot of this activity because sellers have to have more options with a single product than trying to find a buyer (who may or may not) see the synergies of the two start ups together.  Presumably a buyer could put them both together itself if it was so inclined.