Ok what did you guys think would happen. Both Google and Yahoo come out of Stanford University.

It is in Google's best interest to protect Yahoo. Since Google is a improvement on Yahoo's tech.

Look deeper Microsoft's merger was doomed from the start. Google and Yahoo both exist to provide completion to each other.

Methinks Google was actually more afraid of Microsoft buying Yahoo and completely botching it up and leaving Google with a monopoly. Google does not want to end up a complete monopoly and thus on the wrong end of a Federal anti-trust lawsuit. Google would rather help Yahoo sputter along without failing so as to keep the feds off their backs.

Joe said, "My speculation: Jilted Microsoft tried to take a power position over Yahoo by retracting the merger offer and then offering so much less for something still quite valuable. Maybe Microsoft CEO Steve Ballmer and Kevin Johnson really thought that Yahoo was weak enough to cave.

Wrong. Now matters are worse, with Yahoo sleeping with Google. Microsoft was wrong to start this whole Yahoo merger thing. But to have driven Yahoo to Google is perhaps the greater corporate blunder."

@Joe;

Absolutely, positively right on the money on this one Joe. But in the past, MS had the strategy, the clout, the savvy, the synergy that caused other companies to come crawling back and take whatever MS then offered, while kicking themselves in the rear for snubbing MS the first time around. MS doesn't have that now. The problem is, they think they still do.

Google has it now. But Google has demonstrated much more constraint, goodwill, humility and lack of evil. I feel Google will continue in its prosperity and prestige as long as it keeps from getting the attitude of being better than anyone else. That was MS's downfall and why they think they can put out garbage like Vista and IE and think we should all buy into it because it is from MS.

@Tom Berber:

tom, Google isn't a criminal monopoly. they've no power to vendor-lock in or otherwise abuse their place as the #1 search engine. The DOJ wouldn't look in their direction for an anti-trust lawsuit.

Consumers choose Google on the strength of their product, not because of MSFT-like tactics.

Joe:"Wrong. Now matters are worse, with Yahoo sleeping with Google. Microsoft was wrong to start this whole Yahoo merger thing. But to have driven Yahoo to Google is perhaps the greater corporate blunder."
I agree.

Joe, you make it sound like they offered $1 billion for YHOO's search and keep the revenue. They don't. It was $1 billion to take over the search related *assets*, and then a ongoing operation and revenue share deal where MS handled the processing and the advertiser interface for a share of the revenue. BIG difference.

@Al

I am not implying that Google is a criminal monopoly, not in the least. But I still believe they would rather Yahoo succeed than be purchased by Microsoft, botched up and the two combined having less than 10% search share. As good a citizen as Google knows it is, they wouldn't want the scrutiny that could bring. Google will be fine with their majority share of search traffic and some minor competition to keep it all fair. That's part of Google being a good monopoly. But we will still keep an eye on them.

"Wrong. Now matters are worse, with Yahoo sleeping with Google. Microsoft was wrong to start this whole Yahoo merger thing. But to have driven Yahoo to Google is perhaps the greater corporate blunder."

So MSFT should have overpaid more to keep YHOO from commiting suicide? Don't you dare turn down $37 or I..I..I will give my business to GOOG for free! LOL! Of course, they had to try - Who could have forseen this idiocy?

Here's a decent analysis that skips Joe's bias opinion.

http://www.alleyinsider.com/2008/5/hey_yahoo_please_explain_again_why_you_passed_on_microsoft_search_deal

Be sure to read to comments about what Bob was mentioning how YHOO still gets to keep 90% of the revenue.

Joe Says :
"Microsoft was wrong to start this whole Yahoo merger thing. But to have driven Yahoo to Google is perhaps the greater corporate blunder."

@ _ http://tinyurl.com/5bt9ff :
"Once, ``I'd say developers, developers, developers, developers, but not any more, baby; it's advertisers, advertisers, advertisers,'' Ballmer said at an Avenue A client meeting in March in Florida, while running around the stage and punching the air.

Ballmer last week bragged about a plan to increase spending to make MSN into an Internet powerhouse to rival Google. Goldman, Sachs & Co.'s Rick Sherlund put the extra spending at almost $2 billion, with most of it earmarked for MSN."

PS:
The word fail, failing and failure is to frequently associated with Mirosoft these days. Hence fail(ure) is synonymous with "Ballmer".

It wasn't "just" $1B for search. Its also the difference between $35/share and the current price per share ($23.54 today). So, as of today... thats an $11.46/share premium.

$8B / $35 = 228.5 million shares

228.5 shares * $11.46 premium = $2.6B

So, $1B + $2.6B = $3.6Billion

Sorry, stopped reading entry after seeing that you chaperoned 11 teens at Magic Mountain. My thoughts and prayers are with you :-)

Yeah, Microsoft strategy is weird on this one. On one hand the the developer (alpha and beta) software initiatives in login, search, et al, on MSDN then passing these potentially valuable pieces of Microsoft's future to the perpetually incompetent MSM staff (example MS bought Hotmail, gave it to MSN, who forgot to renew the hotmail.com domain name.)
Score: Microsoft wins. Consider difficulty MS had integrating unix shops like Hotmail, and Yahoo search runs on unix.
Seaching for tech has been a pain on Google due to search index scammers. Yahoo was better for awhile now they've become another cluttered search service, less valuable to me and (probably as clearer heads at MS prevail), less valuable to Microsoft. Let Yahoo be Google's albatross.

A few points here, that maybe have not been discussed enough. Even though Yahoo has said all is done with MS, MS itself has said its not. Meaning, expect MS to come back at some point with another offer. After all, MS has made at least 3 offers that we know of over the last 2 years for Yahoo, or part of Yahoo.

The second point I would make, is all the data centers that Microsoft is building around the world. This is a massive undertaking, and I wonder how much money MS is trying into these. My guess is that these new data centers were the hardware part of the online advertising business, and Yahoo would have been the software part of it. So if not Yahoo, would AOL partly full that role? It would seem no. AOL is just too far down on the list now, and MS dosen't seem that interested in it, at least so far. But then again, acquiring both AOL and Yahoo would make more sense than just buying one or the other.

Bottom line, if the Icahn effort fails, expect MS to come back to Yahoo, and give them their price, its all they have left. They are spending too much on these data centers. MS knows that Windows and Office are now entering a period of decline, so its looking for another business model.

"data centers that Microsoft is building around the world. This is a massive undertaking, and I wonder how much money MS is trying into these."

So, you don't know. Ok.

"They are spending too much on these data centers"

Oh, so you do know. Which is it?

Me thinks you are just generally full of shite.

yamama Says :
"data centers that Microsoft is building around the world. This is a massive undertaking, and I wonder how much money MS is trying into these."
So, you don't know. Ok.
"They are spending too much on these data centers"
Oh, so you do know. Which is it?
Me thinks you are just generally full of shite.

chips said :
"My 'GUESS' is that these new data centers were ... "

@yamama :
Me thinks reading is fundamental, eh?

Guess == To judge or form an opinion of, from reasons that seem
preponderating, but are 'NOT decisive'.

Now all Microsoft Watchers
2 weeks before Bil Gates retires (sort of) How do you see Microsoft's legacy on the IT industry? Pros and Cons...

Nice try n0neXn0ne, but I'm not falling for it. Here are the EXACT quotes.

"all the data centers that Microsoft is building around the world. This is a massive undertaking, and I wonder how much money MS is trying into these."

and

"They are spending too much on these data centers"

Your quote comes from the inconsequential sentence... "My guess is that these new data centers were the hardware part of the online advertising business".

Do you fools really expect people to think you're ggenuine when you try to deceive so openly and shallowly?

yamamam Says :
'So, you don't know. Ok.
"They are spending too much on these data centers"
Oh, so you DO know. Which is it?"

"Your quote comes from the inconsequential sentence... "My guess is that these new data centers were the hardware part of the online advertising business".

@yamamam :
No where in the post (Posted by: chips | June 17, 2008 12:04 )
I read where he said he KNOW.
The post was base on a GUESS (a premise).

yamamam Says :
"Do you fools really expect people to think you're ggenuine when you try to deceive so openly and shallowly?"

@yamamam :
That we can agree on.

PS. too "MUCH" is relative

chips Said June 17, 2008 12:04 :
"My guess is that these new data centers were the hardware part of the online advertising business, ..."

@_ http://tinyurl.com/5cq4n6 _
"Inside Microsoft's $550 Million Mega Data Centers"

"By September, it'll be the newest star in Microsoft's rapidly expanding collection of massive data centers, powering Microsoft's forays into cloud computing like Live Mesh and Exchange Online, among plenty of other as-yet-unannounced services ... ."

Maybe the real significance of offering so much less for search than for the whole of Yahoo! is that Yahoo! search was never the point. What this offer suggests is that MicroSoft valued the rest of Yahoo! at $41.6-$3.6 billion=$38 billion, making search a measly 9.5% of the deal. As I have previously suggested, search was probably a diversion to keep regulatory attention away from the areas where a Microhoo! would enjoy near-monopoly. Under that interpretation, the "low-ball" offer was as much part of the diversion as stockholder FUD to support Icahn. Even if the fearsome fox ultimately fails, it has already saved face by claiming that the grapes probably weren't all that good, and it really didn't want them all that badly, anyway.