This very well might be one of those moments that defines tech news in 2008, especially if Yahoo! accepts Microsoft’s 44.6 billion dollar offer. For the past few years Yahoo! has been suffering. In 2006, this became more widely known when Brad Garlinghouse’s “Peanut Butter Manifesto” leaked out and everyone realized that Yahoo! was spreading itself too thin and not focusing in the vital aspects of the company.
Personally, I think it just might be the exit strategy Yahoo! needs after this week’s announcement of layoffs. But even more so, Google would actually have real competition if Yahoo! and Microsoft teamed up. As much as I love Google, if they had real competition they would be under pressure to produce greater and better services and applications. The end result is that you benefit with greater products from both camps – Redmond-Sunnyvale and Mountain View. Or will they call it Redvale now?
How do you think this might affect your favorite Yahoo!-owned properties, such as Flickr and Upcoming, if it does happen? Hopefully, Microsoft will have the sense to not touch those as they’re doing fine on their own. Read more about this incredible breaking news at TechMeme.. you have many articles to chose from.
More on this once class ends..
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Woah. I wake up and there is an enormous shift in the tech-i-sphere. This strikes me as a potentially great purchase for Microsoft but I imagine they’ll chop a lot of the old Yahoo staff.
Does Yahoo really have an option to “accept” the offer or is this geared to be more of a hostile takeover.
Yahoo stock jumps 78% on news of this. My question is would the feds allow this to happen?
http://www.microsoft.com/msft/acquisitions/history.mspx
The complete list of acquisitions made by Microsoft since 1994.
Lionhead Studios seems to have stalled their game output, Bungie Software stopped making Mac games (Halo 1 has been ported- any guess when 2 or 3 will arrive). Hotmail is ugly, buggy, and no damn good on anything other than IE. Multimap has yet to be fiddled too much with, but give them time.
Simply put, MS seem to be the touch of death for innovation, so Yahoo! + Microsoft, not good, particularly for the Flickr brand.
I think Microsoft is going to screw this up royally. The problem with Yahoo! properties is not traffic, style or marketing- it is monetization. If someone can come in and properly monetize the massive amounts of traffic that Yahoo! gets every day, then they can make piles of money.
But that someone is not Microsoft. My bet is that they’re going to re-brand and re-market the sites and traffic will go down the tubes. If you look at their track record, Microsoft has never been very good at content generation or monetization of free services. I don’t think that this will change in the next few years.
Even if the deal goes through, so what?
[no innovation] x 2 = no innovation
whether this happens or not, yahoo and M$ will continue to suck. I do agree however that this could in the short term make google a bit nervous and spur some great things from the google camp.
I guess I’m not really worried about this. I don’t think Microsoft will chop the Yahoo! applications I use. The only concern I have is porting my everything using my Yahoo! account to a .net account.
Adam – I have to disagree with you regarding both Lionhead and Bungie. Lionhead is head strong into the development of Fable 2 with constant interaction with the community, and Halo… I don’t think you can call Halo 2 and Halo 3 a failure just because they weren’t on a Mac.
Yahoo! recently bought Zimbra – an open source (well sort of) collaboration suite that competes very well with Exchange. It’s feature-packed, stable, and much cheaper than Exchange. It does more than Exchange does, and most things they have in common, Zimbra does better. I’ve been running the Network Edition, the pay-for-edition, of Zimbra for quite some time now. It rocks! I’m never going back to Exchange … or so I thought. Seriously, if Microsoft buys Yahoo!, I really, really hope Zimbra gets spun off somehow. It would be a sad loss if Zimbra wasn’t allowed to exist as competition. As I see it, Zimbra is the only viable competition to Exchange today.
Yahoo!, please don’t!!!
You hit the nail on the head, Paul: what happens to flickr? If Microsoft messes up that near perfect site I would be very disappointed.
I agree about pressuring Google. They are dominating the internet right now, but without a formidable opponent they eventually will stagnate. I guess I will reserve some of my other thoughts for when this deal is decided one way or the other.
I have mixed feelings about this. Obviously Microsoft want to increase their market search in the search area but both companies have many overlapping services that have millions of users. Millions of users that are satisfied. Merging two overlapping services is going to be a tough one for Microsoft, in the end the customers could be affected, negatively.
In one way, Yahoo is struggling and really needs a heavyweight partner such as Microsoft. Looking the other way I also question why Microsoft has been unable to increase market share in search. Do They really have to invest $40+ billion to acquire a ~15-20% share?
Wow, this is big! And if it happens, things are going to change… Let’s just wait and see; just hope microsoft don’t screwup Flickr. =P
@David Martin: I didn’t say Bungie wasn’t successful; Halo 3 sold $170 million worth of copies in the first 24 hours of release. My point is that in terms of innovation and particularly the fairly good partnership with Apple, I can see a stalling.
Their proposal was perfectly timed. I just shudder to think what Flickr would become. But yes, if this goes through, it would be healthy competition for Google, and everyone can benefit off that…
Not the first time Microsoft has tried to do this. I sure hope they don’t destroy Flickr.
Lets all put on our thinking cap and be real about a few things:
1) M$ is invested in M$, meaning that any acquistions that they make, no matter how successful they’ve been before acquisition, will be made to transition all code to .NET/Silverlight/M$ Javascript…..no more compatibility with Firefox, Safari or Opera.
2) The ONLY reason that M$ is even looking at Yahoo! is because of the marketshare that Yahoo! has in search…..it could give a rats a$$ about the rest of Yahoo!’s properties. Therefore: Flickr=Gone, Yahoo Mail=Gone, Yahoo Chat=Gone, Yahoo Web Hosting=Gone. Probably the only properties they might keep is Upcoming and Flickr, but in the cases of those properties please see point 1 above.
3) As previously stated, M$ has a horrible trackrecord at monetizing its web properties (beyond Hotmail which was already pretty well entrenched in the email market). It’s hard to see Microsoft being able to make any headway with Yahoo!’s search market because, as I already stated, they’re just going to go under the hood and completely replace all code with M$/.NET/IE specific code. Most folk who search heavily are using Firefox and Opera and when they see that M$/Yahoo! search isn’t working correctly in their preferred browser, they are going to bounce right on back to Google……which is really the opposite of what M$ wants.
Now if you ask me what M$ should have done was make a quiet inquirery into purchasing Yahoo instead of blowing things up out of proportion like they did today. A quiet, non-noisy buyout means that no ones the wiser as to who’s really pulling the strings of Yahoo……therefor people don’t start making migration plans AWAY from Yahoo! to avoid the M$ acquisition curse and you don’t tip your hat to your mortal enemy (Google) as to what you’re trying to do in the forseeable future.
In my mind, the company that should be trying to buy Yahoo and strengthen it’s position in the Tech world is Amazon. They, like M$, crashed and burned trying to enter the search market. However, they’ve got ten+ years experience with monetizing web-based business and are in a better position to fortify Yahoo! during the coming rough years of the economy due their creation of AWS. The best reason though why they should buy Yahoo (or at least entertain the thought of a merger) is because beyond AWS, Kindle and Amazon.com, Amazon really has no other business’ or web properties to stand on. Imagine if they bought Yahoo!:
1) Top notch intergration of Flickr and Upcoming and Yahoo Mail with Kindle.
2) Intergration of Amazon.com and del.icio.us allowing one to easily bookmark and share wishlist items from the store.
3) Intergration of Yahoo! Search with Amazon.com allowing for faster results.
4) Intergrating Yahoo! Chat with Amazon.com allowing for friends and family to chat in real time about items in the store.
5) Increased revenue from Yahoo!’s solid Ad network.
The possibilities are endless and the level of innovation that would come woould be amazing…..
Stammy……please allow us the abillity to edit our comments.
Anyway, in the first half of my comment, point number 2, I meant to say that the only property that M$ might keep is Upcoming. There’s a possiblity that they might keep Flickr, but I really believe that their heavy marketing of the Windows Live service, which already has a photo sharing service, would spell doom for Flickr.
Feeling very vindicated: John Gruber from Daring Fireball agrees with me.
@Frank: You’ve hit the nail on the head.
@frank There is no way Amazon could buy Yahoo. Amazon doesn’t have that kind of money, heck Yahoo’s market cap is larger then Amazon. I could see a merger, not an acquisition. Both brands are much to valuable to each company for a merger to happen.
This is not gonna go anywhere at all, we all know it. Microsoft cant even properly make out the Live branch from the MSN network, Yahoo can’t even properly integrate their acquisitions, imagine the mess that it’s gonna produce if the two companies agree to merge !!! I dont trust either of them anymore in their efficiency to achieve and organized several network of services…and no one wants a defragmented set of services.
The one and only reason why Google is popular is simple: homogeneity. It reinforces the power of the brand and the usability.
It may be the only solution for Yahoo employees to survive but will inevitably fail completely in terms of competition
I don’t understand what the phrase “exit strategy” even means for a company worth tens of billions of dollars and already owned by its shareholders.
@George:
Yahoo!’s been having some hard times recently, no doubt about that, so this offer could be considered an exit strategy to get them out of their situation.
Meh…
I’ll continue to use Google on my Macintosh.
I haven’t used Yahoo since… well… finding out about Google.