Yahoo Music is a Real Problem
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News Brief. Yahoo is shuttering the one service that uses Microsoft technology. |
The closing of Yahoo Music and shifting of customers to RealNetworks Rhapsody accentuates Microsoft's takeover urgency. As I explained last week, one reason for Microsoft's timing: Struggling Yahoo is shutting down services, some of which Microsoft might want from the acquisition.
There's irony in Yahoo Music's closing. Yahoo is generally built on open-source, free and other non-Microsoft technologies. Yahoo Music is a glaring exception, and now it will be extinguished. Microsoft should be concerned that Yahoo will continue service shutterings while the unsolicited acquisition hangs in limbo.
The service closings, while perhaps benefiting struggling Yahoo, have another context in view of Microsoft's $44.6 billion, unsolicited bid: scorched earth. If Microsoft ever gets Yahoo, some of the best assets may have been burned along the way--and possibly with intention and venom. If Yahoo management wants to maintain the company's independence, but shareholders are ready to take that 62 percent premium offer, scorched earth services would be one way to spitefully diminish the acquisition's value. As I said last week, they're called hostile takeovers for a reason.
Restructuring would be a reasonable excuse for the service shutterings, while Yahoo's board prepares for an unwanted and unwelcome takeover. If a merger occurs, there's no question that Microsoft will extinguish the broader Yahoo brand and much of the products and services unique characters. Michael Gartenberg, a JupiterResearch research director, blogged on Friday: "What do you get when [you] cross Microsoft with Yahoo? A) Microsoft."
Related:
- Ballmer Details Ways Yahoo Deal Would Impact Google, eWEEK, Feb 4., 2008
- Microhoo Could Heat Up the Online Ad Battleground, eWEEK, 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
- Google Calls Microsoft Bid for Yahoo Troubling, eWEEK, 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
- Microsoft's Bid for Yahoo Faces Challenges, eWEEK, Feb. 1, 2008
- Microsoft Moves to Buy Yahoo, eWEEK, Feb. 1, 2008
- There's No Must in Microsoft's Yahoo Bid, Microsoft Watch, Feb. 1, 2008
- Microsoft's Yahoo Bid Could Benefit Enterprise Users, eWEEK, Feb. 1, 2008
- Why Did Microsoft Yell Yahoo, Today?, Microsoft Watch, Feb. 1, 2008
- Microsoft-Yahoo Is a Developer Services Boost, eWEEK, Feb. 1, 2008
- Yahoo Is Microsoft's Last Web Stand, eWEEK, Feb. 1, 2008
- Ballmer's 'Moody' Yahoo Pitch, eWEEK, Feb. 1, 2008
- Microsoft Deal to Cancel Yahoo Pink Slips?, eWEEK, Feb. 1, 2008
- Microsoft! Buys! Yahoo!, Eric Lundquist Upfront, Feb. 1, 2008
- Break Down the Garden Walls, Masked Intentions, Feb. 1, 2008
- Blodget Bludgeons Windows Live to Death, Microsoft Watch, Oct. 8, 2007
- Will Microsoft Yell Yahoo?, Microsoft Watch, May 4, 2007
Comments (7)
Just want to say that this is a very intelligently written article, and it definitely would make sense...
Posted by thatguy | February 4, 2008 2:49 PM
One of the reasons I avoid many "MS services" which would include Yahoo Music, is MS generally has adopted and used DRM in a big way. DRM is something to avoid, therefore, MS is too, mostly.
Would suspect that one of the reasons that Yahoo Music is being dropped is because sales of DRM music, is using MS DRM. While I am not a customer of Yahoo Music, I do believe that the "Microsoft technologies" that Joe Willcox is talking about for Yahoo Music is none other than MS DRM. Bet the downloads are all in WMA format with heavy DRM built into them.
And therefore not enough people who wanted to buy that crap because of the heavy MS DRM restrictions on the music they bought. Therefore the market has decided.
While I am at it, DRM is another big reason that Vi$ta is such a train wreck.
Posted by chips | February 4, 2008 3:13 PM
And maybe it would just backfire on Yahoo! If Yahoo! does sell off all the critical services you claim they want, Microsoft could simply refuse at the last minute to buy Yahoo! and in the process the Company is destroyed, one less competitor for Microsoft.
Joe, you are not thinking this strategy out, this can work out in Microsoft's favor either way.
Right now, I see how this integration can work, MS can still keep the Open Source infrastructure powering Yahoo!, keep the Yahoo! name as a brand and call it a Microsoft Company. Services such as Yahoo and Windows Live Messenger could interchangeably work from either domains (Live, Yahoo, MSN, Hotmail). Right now you can do that, which is an example of key integration between both Companies.
The same could be provided by Services like Mail, I can sign into Windows Live Mail with my Yahoo address and all my emails from that Domain show up. Of course, things like Calendaring, Autos can be merged without adversely affecting the core brand. Microsoft could market the Yahoo brand as an alternative if you don't like MSN and Windows Live services. Just that revenue from either web properties and Adsense Services are going to one Company - 'Microsoft'.
Posted by Andred Da Costa | February 4, 2008 3:52 PM
Yahoo has a music service? Who new?
Obscure birds of a feather flock together.
Posted by Daisy Mae | February 4, 2008 4:04 PM
Struggling Yahoo is shutting down services, some of which Microsoft might want from the acquisition.
Good point Joe.
Yahoo should close, sell off, and spin off, parts of Yahoo, before the Evil Empire M$ gets its dirty hands on it. It might not be good for M$, but would be for everyone else, including users.
Posted by chips | February 5, 2008 4:48 PM
Hey, just wanted to alert anyone reading I-Menst hype about VCSY stock, that it is a scam. VCSY is a penny stock that is being hyped by I-Menst in order to artificially increase it's value. Although this scam is not working, and in fact VCSY stock has dropped significantly since I-Menst's hype, he continues. This scam is focused on you, the reader of Microsoft Watch. This is the wrong forum for I-Menst to be doing this and the owner, Joe Wilcox, should be blocking scams/spam such as this
Now is the time to sell VCSY stock. It is now nearly worthless and the company is headed toward non-existence. If you have not read it, please click on this link: http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?capId=661527
That is from Business Week, not I-Menst.
The patents VCSY holds are unenforceable and therefore are of no threat to Microsoft whatsoever. I highly recommend a sell when it comes to VCSY stock.
Again, please take note that I-Menst does not refute the very facts and evidence that VCSY provides itself. All I-Menst has to go on is $3 mil lawsuit from October last year against a Chinese company. It wasn't enough to put VCSY back on track financially. Not by a long shot.
VCSY is still unable to pay its debts and employees.
I highly recommend that if you happen to have VCSY stock, sell it at your earliest opportunity to minimize your losses. Do not let I-Menst give you false hope.
You can see the full financial picture of VCSY from a highly reputable source, Business Week. Check it out: http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=VCSY.OB
Posted by Tom Berber | February 7, 2008 9:26 AM
Yahoo has a music service? Who new?
Obscure birds of a feather flock together.
Posted by kız oyunları | April 7, 2008 9:58 PM