The Internet bride: Yahoo! & Microsoft
Last April, we blogged about Yahoo losing direction. Last June, Yahoo's board kicked then-CEO, Terry Semel, upstairs to "Chairman" and appointed founder Jerry Yang as CEO. Yesterday, Microsoft went public with a $44 billion unsolicited bid to acquire Yahoo. If Microsoft succeeds with this bid, Yahoo might just find direction. Except, it's not the direction they were hoping for--to be relevant to the web again.
Microsoft and Yahoo have both been in the doldrums for a few years now with languishing product lines and unclear directions. Most of their problems can be boiled down to a single word--Google.
BBC business editor, Tim Weber, puts it well, saying "If Yahoo agrees to the deal with Microsoft, it will be a shotgun marriage, but it will be Google holding the shotgun."
Yahoo has been lost for years now. It almost seems like Semel never realised that he moved from Hollywood to run a web company--it's not a movie studio and top brass really do need to know what RSS is. As Google's grasp on technology made them billions, Yahoo has tried to buy themselves out of irrelevance (Flickr, Delicious, Upcoming) and they've tried to build better technology (ad-targeting, web search), but they've gotten nowhere.
Microsoft is increasingly threatened by Google, Apple, Firefox, Nintendo and myriad others. Microsoft is known for their dominant market share, they've never been known for excellence in products or technology. So, it isn't outside the realm of possibility that within two years, Microsoft will be competing everywhere and nowhere.
Microhoo looks good on paper, but my bet is that this merger will be the end of the road for both players. Microsoft has never understood the web--not from a technology or product perspective. Yahoo has made great products, but has constantly struggled with monetising those products as they've been ineffectively floundering to prove their technology can hold a candle to Google's.
If the acquisition goes through, Microhoo is going to have a long and painful integration with very little light at the end of the tunnel. This might just be the best belated Christmas gift their competitors ever got.
Hrush
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Reader Comments (6)
Atleast, if Microsoft has *any* sense left, they will simply do away with their live services and just adopt Yahoo's platform and interfaces for everything. That might give them more credibility as an internet player than they have managed to accrue for themselves since acquiring (and wrecking) HoTMaiL.
I don't think a MS-Yahoo combine will be strong - if anything, it will be bulkier and less agile. Maybe the best case scenario for MS is that the deal doesn't go through. If Yahoo does lose marketshare, then who gains - MS or Google?
that's as well put as could be possible.