Microsoft and the Yahoo Lobotomy
|
News Commentary. OK, so who spiked Steve Ballmer's and Kevin Johnson's drinks with la la juice? |
They want to buy just Yahoo search? Nothing else? Wall Street Journal, which has a good record reporting the Microhoo blow-by-blows, claims Microsoft wants to buy Yahoo's search ad business. That's the transaction hinted in Microsoft's Sunday statement.
How stupid, or perhaps desperate, do Microsoft execs think is Yahoo's board of directors? So let me try to understand: Yahoo wouldn't sell the whole company, but it would give up crown jewel search? Seriously, are Microsoft execs totally psycho? Delusional? Definitely, Yahoo's board would be nuts for taking this kind of deal.
It's a strange concept for a company that claimed Internet Explorer couldn't be removed from Windows. Microsoft execs assert that Yahoo could surgically remove search from its business. Everything is tied to search. Logistically, search is the principal reason for Google's success selling contextual keywords and advertising. Yahoo's banner advertising is stronger, but removing search would cut down the advertising blood flow. It would be much harder for Yahoo to remove search than for Microsoft to chop the browser out of the operating system.
Search is the one thing Microsoft should want from Yahoo—along with the data centers. It's the catapult to that distant No. 2 position behind Google and the platform for building a stronger advertising business. And Yahoo is just going to let this crown jewel go?
Yahoo started as a search company. Search is core to Yahoo's business, strategic and technological identity. Overture, which Yahoo bought in 2003, pioneered the keyword business model that Google made mighty profitable. There are reasons why Yahoo search share is more than double Microsoft's.
If search is so unimportant for Yahoo, why does Microsoft want it so much? And how arrogant of Microsoft executives to think they can better manage Yahoo search. Microsoft's Online Services group is a perennial money loser. Ad sales are up, but profits aren't. In my testing, Microsoft's search service still lags Google and Yahoo for relevancy—that is accuracy of useful information related to search terms.
The search acquisition plan reveals how little regard Microsoft execs have for Yahoo and how much of a nuisance competitor they see the company to be. Removing search would be akin to lobotomizing Yahoo. Microsoft could in one transaction leap closer to Google and leave behind the dying Yahoo competitor carcass. This plan makes sense in the lame brain of some bean counter or, worse, some Microsoft executives too insulated by the corporate culture up there in Washington state.
Who thought up this ridiculous plan, or even seriously thought Yahoo would be that desperate? If this is Kevin's doing, he loses my confidence as president of Microsoft's Platform & Services division. If Yahoo's board even slightly considers selling search, they should be replaced.
I retract what I said yesterday and today. The devil you know isn't better, after all. Yahoo would be better off taking its chances with the Carl Icahn proxy fight than accept the Microsoft lobotomy. Quick, somebody upload to YouTube the last 10 minutes of "One Flew over the Cuckoo's Nest" and e-mail the link to Yahoo CEO Jerry Yang.
Related Posts:
- Microsoft's Yahoo Plans advance>>08, Microsoft Watch, May 19, 2008
- Steve Ballmer and the Microsoftdom of Yahoo, Microsoft Watch, May 18, 2008
- Icahn Yahoo Better Than You, Microsoft Watch, May 15, 2008
- Readers Woo-Hoo, Boo-Hoo Microhoo, Microsoft Watch, May 8, 2008
- Yahoo: Between a Rock and a Hard Place, Microsoft Watch, May 8, 2008
- Let's Make a Deal! Please?, Microsoft Watch, May 7, 2008
- Why Didn't Microsoft Yell 'Yahoo'?, Microsoft Watch, May 5, 2008
- Where's the Yahoo Shareholder Revolt?, Microsoft Watch, May 5, 2008
- Will He Stay or Will He Go?, Microsoft Watch, May 5, 2008
- Translating Steve's Letter to Jerry, Microsoft Watch, May 5, 2008
- The Microsoft-Yahoo Blame Game, Microsoft Watch, May 3, 2008
- What Steve Said to Jerry, Microsoft Watch, May 3, 2008
- Microsoft Boo-Hoos Yahoo, Microsoft Watch, May 3, 2008
- Open Letter to Steve Ballmer, Microsoft Watch, May 1, 2008
Comments (13)
Joe, at least now we know what Ballmer, Gates, and Microsoft want most out of Yahoo, Yahoo search.
Ask yourself why. Why could not Microsoft make a search engine, with all their software engineers, that could compete with google? Or even Yahoo, for that matter. Is it because google search runs on linux, and Yahoo search runs on BSD, and MSN/Live runs on Windose? Maybe, but its probably more. Maybe the ones running Microsoft do not have a clue anymore how to run the business. Even I do not think NT software is that bad, if the designers at the helm, (Gates) would let the coders do what they could, and not ask for so much lock in, and other bloat. But then again, maybe MS is giving up on NT, and has decided to move to a BSD type of distribution, after Windows Seven.
Carl Icahn's proxy fight, he cannot win, but will sell the stock somewhere down the road for a profit. He is a short term opportunist. he knows even if he loses the proxy fight, that Yang is already in the process of turning around Yahoo. Either way, he makes money.
Posted by chips | May 20, 2008 12:39 AM
It's funny, because when all this began, Microsoft said they wanted Yahoo for its brilliant programmers and engineers. WHOOPS! Nevermind, Microsoft has flip-flopped again!
Posted by Kerrick | May 20, 2008 3:13 AM
Look closer. If MS markets are so safe why would they be doing this.
There is something else wrong if you look deeper.
Posted by oiaohm | May 20, 2008 7:24 AM
Dear Joe,
We get a lot of Microsoft /yahoo from you recently
Please stop it
Try to write something else
Posted by Peter | May 20, 2008 9:00 AM
Yahoo's executives and board of directors have already proven that they are incredibly stupid. They have put themselves into a position where they are vulnerable to both Microsoft and Ichan. Pick your poison...
Posted by JohnJ | May 20, 2008 10:06 AM
That is so stupid, I want give something more of credit to MS, I will wait some "new tricks under his sleeve"
-------------
translation
Peter: Please stop Joe this is too painful!
Posted by Marco | May 20, 2008 10:09 AM
Well, let me quote myself:
Steve Ballmer and the Microsoftdom of Yahoo:
"Microsoft could possibly acquire and merge some of the lucrative services in Yahoo!'s portfolio that can build their existing Live Services more strongly against the competition. For instance could be Yahoo!'s search technology in place of Live, but licensed back Yahoo!"
So far I'm on the ball. Its the most logical choice, its not overlapping with any other technologies from Windows Live and it will add robustness to Windows Live Search which is just way behind in my opinion.
Posted by Andre Da Costa | May 20, 2008 10:36 AM
Andre: but licensed back Yahoo!"
It was your idea?....err.... congratulations?
Posted by Marco | May 20, 2008 11:37 AM
"Why could not Microsoft make a search engine, with all their software engineers, that could compete with google?"
Excellent question. And I haven't heard one opinion yet that comes close to describing what Microsoft would do with a technology gap in their engineering. A technology gap that requires an Intellectual Property deal to buy the XML bits that would put Microsoft in the Semantic Web arena.
Nobody exen asking the questions.
You intentionally ignorant folk deserve to be blind-sided.
Posted by portuno | May 20, 2008 11:50 AM
Joe, the WSJ only confirmed an earlier story by Reuters. In both cases, we're talking the ubiquitous "anonymous sources". So maybe wait for some actual proof of what is being proposed by MSFT instead of convicting them in advance.
Posted by Paul | May 20, 2008 1:23 PM
What then is the difference between selling Yahoo search to Microsoft and outsourcing search to Google? If Yahoo is willing to outsource to Google they are, in fact, giving up on search. Microsoft's offer is a direct response (and a better alternative for Yahoo) to a Yahoo-Google deal.
Posted by Michael | May 20, 2008 3:24 PM
odd take on this story, even for you Joe.
"And Yahoo is just going to let this crown jewel go? "
You are aware that Microsoft would be PAYING yahoo for this, right? What part of a 'i buy, you sell' transaction makes this so hard to believe?
Posted by uhura | May 20, 2008 7:29 PM
"If Yahoo is willing to outsource to Google they are, in fact, giving up on search. "
Perhaps Yahoo has the soup necessary to bring portals up to their rightful place in a semantic web. Search will be very old hat when you can put a search text box on any page targeted at any discipline.
What's fascinating about the industry is its short attention span, defective memory and its longing for things to always be the same no matter how much they complain things don't change.
What is a semantic web for, ladies and gentlemen? You don't understand how to answer that question so you don't know how to ask larger questions. This is why you're still lashed up to the "who's got the better operating system" argument that will close out computing from the 20th century.
A semantic web portal is an operating system for geographies and verticals. It's a way to knit the same discipline together no matter how different the vertical. It's a way to knit the same vertical together no matter how different the geography.
You won't be doing that with Vista any time soon although all the marks of an aborted attempt at making Vista semantic web ready is easily visible throughout the application.
But, you won't believe that because you believe everything Microsoft has told you for years... even though you've only found out very recently Microsoft will lie to your face and smile about it. And you'll feel better for it. It's symptomatic of an abusive relationships and, boy howdy, did you get... (fill in blank here).
Posted by portuno | May 20, 2008 8:04 PM