Microsoft's One Yahoo Mind Divided
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News Commentary: How is it that the Microsoft corporate hive mind could be united in its quest to acquire Yahoo? It's not. |
That's my conclusion, given the lunacy of Microsoft's potentially hostile takeover of Yahoo. There's no way Microsoft management can be united about the takeover. My suspicion: There is general unity on the attempt, simply because of the damage inflicted on Yahoo in trying. I think that the faction believing in the actual merger is much smaller.
I said the acquisition was nuts on the first day. Other folks are reaching similar conclusions. "It's going to be a disaster," dot-com boom financial wunderkind Henry Blodgett said of a Microsoft-Yahoo merger. Even Mini-Microsoft calls the Yahoo acquisition "dumb." By the way, Mini made the eWEEK list of the Top 25 Most Influential People at Microsoft.
Given this takeover lunacy, my thinking on Microsoft's corporate hive mind is this: A small portion is pushing hard for the acquisition because it believes Yahoo is the springboard to Google. A much larger portion approves of the acquisition attempt, but with a different objective—pushing Yahoo the hell out of the way. I wanted to use a hawks and doves analogy, but there are no doves in the Yahoo bid. There are perhaps lesser and greater hawks. The greater hawks want to destroy Yahoo, and the acquisition is one way to go about it.
My question, to which I don't have an answer, is this: which part of the divided Microsoft mind, united around common direction, is now in control? It may not matter. Whether or not Microsoft absorbs Yahoo, the hostile takeover will do the Internet media company great harm.
For those Microsoft managers that see Yahoo as being in the way, the hostile takeover is a delightful tactic, brilliantly timed. Microsoft's offer is a double belly punch: Whack, when the share price is low, and Pow, when Yahoo's co-founder returns to save the company.
Maybe these greater hawks are motivated in part by the past and what could have been. How would the competitive market look today if, in 1997, Microsoft moved to buy Apple instead of make a tree-propping $150 million investment? Apple had reached new lows, and many analysts had written off the company as dead already. Apple was vulnerable to hostile bid. Suppose Microsoft hawks could have swooped in just as co-founder Steve Jobs returned to save the company. An Apple takeover by Microsoft would mean no iMac, iPod or iPhone.
Jerry Yang, Yahoo's co-founder and CEO, is in similar position as Jobs was in 1997. Yang has only been back as CEO since last summer. Like Jobs, Yang has vision and, more importantly, commitment. Yahoo is Yang's baby; there is a strong emotional attachment.
I should say that no one running Microsoft has the same passion, not even CEO Steve Ballmer. Many top executives may have worked at Microsoft for a long time, but it's not their offspring; they didn't create Microsoft. Their detachment may be one explanation for the willingness to risk so much in a hostile bid to buy Yahoo. More importantly, the attempted acquisition demonstrates that Microsoft Chairman and co-founder Bill Gates really isn't involved in the company anymore.
Yang's passion is the only hope Yahoo has of remaining independent. Already his efforts are bearing fruit, but the hostile bid overshadows his early Yahoo revival efforts. Wouldn't Jobs have had similar problems a decade ago, from nothing more than an attempted Microsoft takeover?
To Yang's credit, and the credit of other top executives, Yahoo is pushing ahead with important changes and developments, despite Microsoft's reckless interference. The announcements made in just the last week, many in the last two days, signify a turnaround strategy in progress:
- Zimbra Collaboration Suite 5.0 released
- Flat-rate Web hosting for SMBs
- Search deal with T-Mobile boots out Google
- Acquisition of Maven Networks
Yang needs the time Jobs got with Apple to turn around Yahoo. But Microsoft won't give it. The lesser hawks want to buy Yahoo and the greater hawks want to run it to ground through the takeover attempt.
For the greater hawks, this attack was too long in coming. For years, I have expressed surprise that Microsoft wasted so much time beating its head against Google when the more immediate competitor was Yahoo. Microsoft and Yahoo compete in way more areas than do Microsoft and Google. I repeatedly wrote about Microsoft-Yahoo competition when working as an analyst.
Whatever the hostile takeover's outcome, Yang's passion and leadership should be everybody's focus, particularly Yahoo shareholders. The question everyone should ask: Can Yang turn around Yahoo? If shareholders can believe in him, they should reject Microsoft's bullying bid. If Yang is Yahoo's savior, then partners and customers should stay with the company, too.
There is another possible outcome from the unwanted, unsolicited Microsoft bid: Rather than be destroyed, Yahoo grows stronger through adversity. Should Yahoo not just survive but revive, Yang's story will join Jobs' as one of the great technology yarns of the new century. If Yahoo does survive and stronger, Microsoft—beret of truly passionate leaders—may find new meaning in term Yin and Yang.
[Disclaimer: I'm not an investor in Microsoft or Yahoo—nor any other company. It would be conflict of interest. I make mention of it now, because this post gives advice to Yahoo shareholders.]
Related Posts:
- Yahoo Squeaks, Microsoft Squawks, Microsoft Watch, Feb. 11, 2008
- Yahoo Bounces Bid Ball in Microsoft's Court, Google Watch, Feb. 11, 2008
- Yahoo's Way Out, Microsoft Watch, Feb. 11, 2008
- Yahoo Poised to Reject Microsoft Bid, Google Watch, Feb. 9, 2008
- The Real Reasons Microsoft Wants to Buy Yahoo, Microsoft Watch, Feb. 6, 2008
- It's No Flickr of Hope, Microsoft Watch, Feb. 4, 2008
- Yahoo Music Is a Real Problem, Microsoft Watch, Feb. 4, 2008
- Yahoo Bid Reveals Microsoft's Fatal Flaw, Microsoft Watch, Feb. 4, 2008
- Google Fires FUD Volley at Microsoft over Yahoo Bid, Google Watch, Feb. 3, 2008
- Microhoo: The Worst Deal of the Internet Age, Google Watch, Feb. 2, 2008
- Is Yahoo Worth the Risk?, Microsoft Watch, Feb. 1, 2008
- How a Yahoo Merger Could Screw Up Microsoft, Microsoft Watch, Feb. 1, 2008
- There's No Must in Microsoft's Yahoo Bid, Microsoft Watch, Feb. 1, 2008
- Why Did Microsoft Yell Yahoo Today?, Microsoft Watch, Feb. 1, 2008
- Will Microsoft Yell Yahoo?, Microsoft Watch, May 4, 2007
Comments (14)
Joe says...
"Given this takeover lunacy, my thinking on Microsoft's corporate hive mind is this: A small portion is pushing hard for the acquisition because it believes Yahoo is the springboard to Google. A much larger portion approves of the acquisition attempt, but with a different objective—pushing Yahoo the hell out of the way. I wanted to use a hawks and doves analogy, but there are no doves in the Yahoo bid. There are perhaps lesser and greater hawks. The greater hawks want to destroy Yahoo, and the acquisition is one way to go about it."
A few days ago I made a lengthy comment about History repeating itself by comparing the Roman Civilization in many ways, akin to Microsoft and in so many words, this insightful comment proves my point!
Yes, I fully agree. I certainly believe that this is 'er was, Microsoft's plan on taking on Google. It is the (usual) tactic to attempt to out-flank a large adversary such as Goggle is and appears to be, obviously.
Need I be so redundant as to say, this isn't the first time Microsoft has successfully used this tactic in taking over, sacking, and razing a company, or for that matter, a technology to waste -- How refreshing is it to see that once again, they, Redmond has failed!
I do not relish in the foils of plans, no sir, not usually, but I couldn't help to smile a devious smirk when I found out that MS went down in "Flames."
Anyway, this goes to show a good many folks out there, well, confirms with a good many folks out here that Microsoft lost their eye on the ball. I am only speaking on what you, Joe, has already brought to mind and that is, the mobile business.
Microsoft has once again failed to realize the direction of the people, in meaning, what works for us, what we use day to day, and the perceived direction that we want to go individually differs ever so more drastically from the direction and opportunities that is the reality of the driving force of technology.
If necessity is the true mother of invention, of innovation, then without a doubt, Microsoft is slowly but assuredly becoming an angry and frustrated spectator in a player's sport.
On a personal note: Microsoft through this latest fiasco akin to s schizophrenic business mind in this matter has drawn me completely away from anything called "MS Live", "Messenger Live", "MSN Mail" though I just use it as a receptacle of junk mail to land on their servers rather than clogging my personal email system. I will without a doubt, use Yahoo more often as it is now configured as my second search engine under Google.
Odd, isn't it -- I mean all this press is going to drive the "average Joe" to Yahoo... Did Microsoft factor this in, I wonder?
Posted by Douglas S. Taylor | February 12, 2008 5:11 PM
Holy crap, Joe. There's more unsupported fabrications and opinion provided as fact here than I can shake a stick at. First of all. Blodgett a financial wunderkind? He's a "disgraced former analyst" who was talking up his stocks publicly while trashing them privately, and just avoided jail. Ballmer doesn't have the same passion for MSFT? Are you I-N-S-A-N-E? Gates isn't involved in the company anymore? Again, are you serious? Do you really think he wasn't all over this? Finally, YHOO's turnaround under Yang? It sure wasn't showing in the results. And many, including your financial wunderkind there, say he had failed to make the bold moves or show the urgency necessary.
Posted by Paul | February 12, 2008 5:39 PM
Hmm, I do find it interesting that all across the interwebs, wherever Bill Gates used to be portrayed as the aspergers' suffering egomaniacal looney with regular vitriolic spastic attacks, he now is the altruistic wise dude and Ballmer is responsible for just about anything bad at Microsoft...
What a difference retirement and a selfless and humble move like the Bill and Melinda Gates Foundation makes...
For the record I would have much preferred something like the Overcharged Windows and Office Customers Foundation, but I'm weird like that...
Posted by whatever | February 12, 2008 6:28 PM
You lost me at Henry Blodgett quote. That a$$hole has lost all credibility and should NEVER be quoted from again. He should simply fade into the background.
Posted by 87 | February 12, 2008 8:33 PM
Quoting Joe; "More importantly, the attempted acquisition demonstrates that Microsoft Chairman and co-founder Bill Gates really isn't involved in the company anymore."
----------------------------------------------------
Just how in the heck Joe, did you come up with that statement????
While its true that Bill will not be at MSFT everyday, in his old role, you can bet he will be there some. And lets, try to remember, who is the Chairman of the Board and largest shareholder.
There is absolutely no way that Steve Ballmer would have MS buy Yahoo, without permission from Bill Gates. In fact, if anything, it was Bill's idea.
Posted by chips | February 12, 2008 10:15 PM
Microsoft Has No Answer For Their Broken XBOX Live DRM
http://consumerist.com/355519/microsoft-has-no-answer-for-their-broken-xbox-live-drm
Quotes; "It's well known that Microsoft's 360 console has an unusually high failure rate resulting in many users suffering what has been coined the 'Red Ring of Death' and being forced to send in the console on warranty. While Microsoft has extended the warranty on these systems for 3-years against this problem they are refusing to fully repair the devices. While they are happy to replace the device if you are an Xbox Live Marketplace user your box will not be fully functional on return. If you have purchased any content through their Xbox Live service which sells full games, movies, tv shows and add-on content for various titles you will find that it no longer works properly on your replacement console."
Posted by chips | February 13, 2008 2:43 AM
Like I said, Yahoo looks like they have something...
... hidden in their back pocket.
Where did these things come from and why can't Microsoft show this kind of thing off in public in contracts (not just buying companies that might be able to do this one day).
Just think how much more powerful Microsoft's clout would look if they could claim a mobile open-platform and a search engine that rates well enough to cover a European footprint.
Instead, Microsoft has to "act" like they do these things and get journalists to fall all over themselves describing how powerful Microsoft might be if they can integrate all their possible projects into real products and services...
Microsoft can't and tiny "insignificant" Yahoo can. Something smells funny here.
Microsoft management is foolishly behind the times and very vulnerable.
(url deleted)
Yahoo Scores Search Victory over Google
Print All Articles Letter to the editor Podcast
on 12 February 2008, 13:07
by Cassimir Medford
Yahoo, despite its well-documented problems and its perennial also-ran status in PC-based search, will grab a major mobile prize from the clutches of search king Google. The exclusivity means that Yahoo will displace Google as T-Mobile's preferred search engine.
"Today's announcement will be an important boost to Yahoo's position as the operators' friend in the hazardous world of the mobile Internet,"said John Delaney, an analyst with Ovum. "Yahoo is doubtless taking much consolation from this."
The deal, which kicks in at the end of March (there's that "March" thing again) bolsters Yahoo's lead over Google in the emerging and potentially lucrative world of mobile search, and the attendant revenue-generating mobile search advertising market.
(more at URL)
Oh, really? Yahoo! across the entire European footprint, huh? Wow.
And, what, pray tell, shall they offer technology wise?
Yahoo Launches 'oneConnect' For Mobile
http://www.informationweek.com/news/showArticle.jhtml?articleID=206502032
The communications service is scheduled to be rolled out as part of Yahoo Go 3.0 and Yahoo's new mobile home page in the second quarter of this year.
By Elena Malykhina
InformationWeek
February 12, 2008 05:00 PM
Yahoo (NSDQ: YHOO) on Tuesday introduced a new service called oneConnect, which will combine e-mail, instant messaging, text messaging, and social networking in one mobile platform.
The company plans to roll out oneConnect as part of Yahoo Go 3.0 -- an all-in-one mobile offering -- and Yahoo's new mobile home page in the second quarter of this year. In the meantime, Yahoo is showcasing oneConnect at the Mobile World Congress conference in Barcelona this week.
(more at URL)
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Well, well, well. My, My, My. I would say, Mister Ballmer, it's time for your gray haired granny to start showing the cards or the poker game is going to go into the crapper.
What have you got for a mobile open-platform ... and where will you put it?
It would have been nice for Yahoo to announced they would accept the MSFT offer before this announcement. Now, as it it, the Yahoo announcement simply serves to underline Yahoo managment's incentive to shareholders to stick with an independent Yahoo... and not throw this new baby to the bald headed wolf.
Posted by I-Man | February 13, 2008 2:50 AM
The only thing Ballmer is doing is keeping Ozzie locked in the closet so he doesn't say anything stupid and he has MSFT lawyers guarding the door. Why, they won't even let Ozzie on a stage by himself. At MIX 08 he has a handler onstage with him in the guize of Microsoft General Manager of the Development Division, Scott Guthrie.
I suppose he's there just in case Ozzie gets too carried away and begins describing things that Microsoft is, uhhhh, saving for a... uhhhhhhhh... a surprise. Yeah. AThat's right. A surprise. That's the ticket.
You damn developers are too stupid to know when you're supposed to be able to use this next generation stuff. You have to be spoon fed your squashed carrots.
Get Guthrie to put on a latex glove, shove it up Ozzie's otherwise bald bottom and make his mouth move and you got another Las Vegas dummy act.
Ballmer's not lazy. He just has a lot to hide right now.
Posted by I-Man | February 13, 2008 6:02 AM
these comments remind me of why i never go to yahoo finance's boards. nothing but trolls with more time than sense. seriously folks, i hope you realize that for every 30 minutes you spend pecking your unoriginal thoughts at your keyboard... you get maybe 1 reader who reads all the way down to the end of sentence 1. I know I didn't even get that far.
Posted by 12 | February 13, 2008 8:22 AM
As much as I'd like to ascribe ill to Microsoft, I just can't see where its wiping Yahoo! off the map helps MS. As a "thought experiment", imagine that Yahoo! was instantly removed from existence by "the hand of God." What would happen to its share of the Internet? I propose that a few of Yahoo!'s users would move to Microsoft but most would move to Google. If MS fails in its hostile takeover but causes Yahoo!'s demise by its attempt, I see Yahoo!'s demise benefiting Google much more than MS.
Posted by Karl | February 13, 2008 10:46 AM
What are MS's alternatives to Yahoo!? $50 billion is a huge pile of money and I would think that buying Yahoo! is not the only option. Also, Yahoo! is not Apple, I don't see anything coming from Yahoo! that 'wows' me. It is not a company that strikes me a innovating.
Posted by JM | February 13, 2008 11:24 AM
Come on MS! Aren't there a lot of things you could do with $50 Billion other than buy Yahoo? How about fix your operating system? How about do the web right yourself? Wouldn't that be money better spent?
Posted by tb1 | February 13, 2008 12:46 PM
If I ever had any doubts at all about this merger/purchase thing with Yahoo, they were all dispelled today by none other than the GuTards over at Google themselves! They issued statements like:
"Microsoft's acquisition of Yahoo could undermine the open competition on the Internet! ....
"Microsoft which has been targeted by antitrust regulators in the U.S. and Europe, frequently sought to establish proprietary monopolies -- and then leverage its dominance into new, adjacent markets!"
"Microsoft could now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC!"
I answered quickly: "The combination of Microsoft and Yahoo will create a more competitive marketplace by establishing a compelling number two competitor for Internet search and online advertising. (The #2 I was refering to is Google!)
The alternative scenarios only lead to less competition on the Internet."
THE TRUTH!
The Gutards are a lot smarter than I thought, they finally have realised who they have pissed off here! They haven't seen anything yet! I have already beefed up the legal team budget by 80%! We are going to gut the Gutards, go to court, then in a few years pay a negotiated fine! That's how the law works!
In any case in a few years we will no longer have to worry about Gaggle!
lol
Posted by steveballmer | February 13, 2008 7:01 PM
Ref Joe Wilcox comments on Microsoft interest into Yahoo! I really dont believe we havent seen
it all. Takeover occur when tech inventions subside or the Government demands it. The whole
world is going into a down hill slide economically
and probably environmentally too.
All those companies, Microsoft, Yahoo, Google are
doing a great job. Stagnation is the trouble. When
a company takes over another company then we have large layoffs. Did Yahoo really have to lay off 1000 people? Look around. See GM report yesterday.
The sneaky word now is "gone private".
Posted by Jesse Mata | February 14, 2008 3:03 PM