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Yahoo Bid shows Microsoft on the Ropes

CmdrTaco posted more than 6 years ago | from the i'm-available-for-one-percent-of-that-offer dept.

Microsoft 402

Ponca City, We Love You writes "One day after the announcement of Microsoft's plan to buy Yahoo, there is an interesting piece from the NY Times analyzing the reasons behind Microsoft's bid and proposing that the bid is a tacit, and difficult, admission that Microsoft did not get its online business right and that online losses continue to mount while Google makes billions in profit. Microsoft "finds itself in a battle where improving its search algorithms and online ad software is not going to be enough," writes the Times. With the Yahoo bid Microsoft is trying to buy a big enough share of the market to be a credible alternative to Google with online advertisers. "This shows just how worried Microsoft is by Google," says David B. Yoffie. "Microsoft has faced competitive threats before, but none with the size, strength, profitability and momentum of Google.""

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402 comments

Eh? (5, Insightful)

Dan100 (1003855) | more than 6 years ago | (#22273080)

How can a company that can afford to pony up $44.6 bn possibly be described as being "on the ropes"?!

Re:Eh? (5, Insightful)

tomhudson (43916) | more than 6 years ago | (#22273116)

"How can a company that can afford to pony up $44.6 bn possibly be described as being "on the ropes"?!"

Here, let me fix that for you ...

"How can a company that feels it has to pony up $44.6 bn possibly be described as being anything but "on the ropes"?!"

... and its not an "all-cash" bid. 50% Microsoft stock. At least they aren't paying in

At least they're not offering to pay in Bush coins [blip.tv] ... yet!

Re:Eh? (4, Interesting)

jonbryce (703250) | more than 6 years ago | (#22273130)

Look at for example GEC/Marconi. It can happen.

People aren't buying Windows Vista and Office 2007 because they have Windows XP and Office 2003 that does the job just fine, and possibly better, and it costs nothing to continue using it. None of their other attempts to diversify - Zune, X Box, Windows Live etc have been very succesful, so there are problems ahead.

They aren't bankrupt yet, but they are taking action to try and avoid it while they still can.

Re:Eh? (4, Interesting)

rustalot42684 (1055008) | more than 6 years ago | (#22273352)

Actually, I was helping my neighbour with their new computer the other day, and when I pointed out that you didn't need to pay $150 for Office 2007 Home&Student to write letters, they were very open to the idea of trying out OOo. I think they'll be very happy with it, mostly because they saved $150.

Re:Eh? (1, Flamebait)

RobBebop (947356) | more than 6 years ago | (#22273682)

I pointed out that you didn't need to pay $150 for Office 2007 Home&Student to write letters, they were very open to the idea of trying out OOo.

So, ten years later, the identified threat [wikipedia.org] turns out to be true, albeit moreso in the Office monopoly than on the OS. How quaint.

These documents acknowledged that free software products such as Linux were technologically competitive with some of Microsoft's products, and set out a strategy to combat them. The documents were embarrassing largely because they contradicted Microsoft's public pronouncements on the subject.

I wonder if the "strategy" was DRM and to adopt uncooperative practices. I guess that didn't turn out so well...

Re:Eh? (1, Insightful)

Anonymous Coward | more than 6 years ago | (#22273372)

People aren't buying Windows Vista and Office 2007 because they have Windows XP and Office 2003
Despite what you may read on slashdot, all other evidence suggests that this simply isn't true.

Re:Eh? (0, Flamebait)

A nonymous Coward (7548) | more than 6 years ago | (#22273518)

Despite what you may read on slashdot, all other evidence suggests that this simply isn't true.

Despite what you may post without evidence on slashdot, much other evidence suggests that this has more truth than falseness.

Re:Eh? (1)

multisync (218450) | more than 6 years ago | (#22273558)

Despite what you may read on slashdot, all other evidence suggests that this simply isn't true.


Okay, I'll bite. Other than new systems preinstalled with Vista and Office 2007 (no choice available to the customer), which evidence suggests people are choosing to move from XP/Office 2003 to Vista/Office 2007?

Re:Eh? (1)

abigor (540274) | more than 6 years ago | (#22273688)

Well, a quick search found this for Office 2007 concerning its initial sales success:

http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9011237 [computerworld.com]
http://www.informationweek.com/management/showArticle.jhtml?articleID=197006187 [informationweek.com]

Speaking anecdotally, I can say that I've seen it widely deployed. Not the case for Vista though.

Re:Eh? (3, Interesting)

masdog (794316) | more than 6 years ago | (#22273692)

Anecdotal, mostly. Office 2007 isn't that bad...but my company (like many others) is having a hard time justifying an upgrade to 2007 when they can see the costs associated with user retraining. I personally own 2007, though, and I have a hard time trying to go back to 2003 or earlier versions.

Re:Eh? (5, Informative)

Dan100 (1003855) | more than 6 years ago | (#22273422)

People aren't buying Windows Vista and Office 2007 because they have Windows XP and Office 2003 that does the job just fine, and possibly better, and it costs nothing to continue using it.
Please folks, RTFA. To quote:

[Last year] The Office division alone had quarterly revenue of $4.8 billion equal to Google and an astronomical $3.2 billion in operating profits. The Windows unit is even more profitable.
In fact, Microsoft's Q1 results last year were the best for seven years [guardian.co.uk] :

Microsoft stunned Wall Steet with its latest financial results, based on the success of Windows Vista, Office 2007 and the Halo 3 game. First quarter revenues jumped by 27% to $13.76 billion, and profits by 23% to $4.29 billion. Sales beat expectations by more than $1bn.
Microsoft dwarfs Google in both revenue and profit. It's just lost out in the online services market (where despite rising revenues it still makes a loss), and wants to catch up. To do so, it can afford to make investments nobody else can, such as buying out another huge company with a big (if not terribly profitable) portfolio of online services. Together, the "network effect" would make both much more profitable than they are operating seperately.

Re:Eh? (2, Informative)

MightyMartian (840721) | more than 6 years ago | (#22273636)

Or not. There's no guarantee that buying Yahoo is going to make it a uber-profitable division, nor does it mean that Microsoft somehow magically gains from it. Yahoo may be the next biggest, but Google dwarfs it. Yes, Microsoft will buy some market share, but even if it manages to maintain it, it's going to be an ironic twist, a sort of online market share version of the Windows/OSX split.

Re:Eh? (5, Funny)

Wowsers (1151731) | more than 6 years ago | (#22273234)

Let's google for the answer.

Some people just don't like MSFT (1)

NotQuiteReal (608241) | more than 6 years ago | (#22273340)

For example, here's an unrelated article about "OS share" where they count the iPhone as an OS [cnn.com] .

What possible reason do you have to count iPhone, the Wii and Playstation (even in sub-percentage amounts) in a story of "Mac OS" gaining ground on "Windows"? (BTW, they have it at 7.57% MacOS vs 91.46% Windows, that's 99.03, Linux is at .63%). I guess tossing in random stuff is more interesting than saying Windows still has 90%+ of the desktop...

Re:Some people just don't like MSFT (1)

filbranden (1168407) | more than 6 years ago | (#22273710)

Actually, considering mobile devices OSs makes sense, if you consider that in 10-15 years fewer people will be using desktops than mobile devices. Though mobile devices make for a small percentage of OSs today, the tendency is that they'll make a bigger percentage every year, until they surpass the desktop OSs.

That's why all desktop companies are struggling to get their OSs running on mobile devices. Microsoft has Windows CE, Apple has OSX running on the iPhone. There's been a lot of buzz on Linux for mobile devices as well. Although the desktop is the battle being fought today, everyone knows that the war of tomorrow will be on mobile devices.

So, I would say that considering mobile device OSs when talking OS share may make sense.

Regardless, they both scare the hell out of me. (3, Funny)

emil (695) | more than 6 years ago | (#22273390)

With rumors of NSA backdoors into MS operating systems, and Google maintaining search history until the end of time, both of these companies practically have the power on their own to become George Orwell's big brother. If we had any sense as citizens and consumers, there would be a huge rush for the exits (yet here I sit on Windows searching with Google).

I don't like this power over society. Whichever one takes more effective means in demonstrating that their power is benign will have my support. Neither has taken effective measures to prove their goodwill towards consumers as of yet.

Oh, and you can throw in AT&T in that mix, too.

Re:Eh? (1)

RobertM1968 (951074) | more than 6 years ago | (#22273472)

Good question... which leads me to this statement:

"This shows just how worried Microsoft is by Google," says David B. Yoffie. "Microsoft has faced competitive threats before, but none with the size, strength, profitability and momentum of Google."

Though probably true to one extent or another, this is just normal business for Microsoft. They routinely buy their competitors, whether they (or we) think their competitors have a better product or not. Thus, I am sure that DBY has not hit upon MS's full reasoning behind this move. Even if MS Live Search were the best "product" out there, this would be a way for MS to gain more market share in a very short period of time, and thus also increase revenue (ad and services generated), while wiping out yet another competitor.

Also, keep in mind, Yahoo does more than just search engines, and some of their other services also compete with MS's online services (and dont have similar Google services to compete with)... all of the above EXCEPT the Google aspect still apply.

Re:Eh? _ Madness to their methods (tongue-in-cheek (3, Interesting)

az-saguaro (1231754) | more than 6 years ago | (#22273708)

Now, now. Before all you naysayers and Slashdot cynics read too much into this, consider that there may be some real madness to their methods. Consider this report, on the front page of my newspaper, retrieved by my time-traveling teletype machine.

Reprinted from the Bizarro World Times
April 1, 2010

Headline:
BALLMER PLAYS FIDDLE AS MICROSOFT BURNS
Reported by Peter Perplexed and Wally Whathehelljusthappened

Federal investigators with the SEC and FBI, along with Interpol authorities, today released preliminary information about the sudden and dramatic collapse of Microsoft. Investors, employees and customers, still largely in the dark about the sudden seeming evaporation of the company, were none to happy to hear this news, but at least there was a sense of relief that some answers are starting to come through.

Employees at all Microsoft campuses worldwide showed up to work today to find their buildings padlocked, the workforce locked out. Customer support at all levels, the phones at all of the corporate offices, and the MS website and MSN are all completely offline. Shareholders seem to have lost their entire investment in Microsoft as the NASDAQ has eliminated the company form the exchange. What happened? How could it happen so suddenly and so thoroughly? Where are the company principals (not to mention their principles)?

And even more peculiar, we are starting to receive worldwide reports of their latest operating system, Windows Smokescreen (aka Windows 7) suddenly quitting - wiping hard drives on systems that it is installed on, or otherwise refusing to boot a computer. Here at the Times, we first noted problems when many users started getting the following message: "You do not seem to have the properly signed and verified digital rights to the email and txt files you just created - you are hereby prohibited from using Windows again."

Based on the public reporting by the above agencies, plus investigations from multiple news agencies and tech and financial reporters, we believe that the following is an accurate, albeit sketchy recreation of events at the world's largest software vendor, beginning about 2 years ago, leading up to today's dramatic events:

January 2008 - Numerous events indicate that MS is aware of the fiasco that is Vista, its latest release of Windows. Regardless that the new OS has a variety of merits, it simply has too many demerits, and it has garnered no loyalty nor market share among home and business users - especially among businesses - meaning a serious interruption of revenue and credibility for the company and its flagship product. MS announces an accelerated schedule for creating and releasing its next proposed Windows OS - version 7. Many are skeptical.

February, 2008 - MS announces a hostile takeover bid for Yahoo! No one can understand a legitimate or business-responsible rationale for this move. General opinions take the dim cynical view that this is an expensive but lame attempt to compete with Google, by eliminating the third major player in the online search and advertising market. The offer is made at nearly TWICE the outstanding market capitalization of Yahoo!

March, 2008 - Until now, Yahoo! has made no official reply. The unofficial discussion from Yahoo! execs is that the bid is a disgrace, that they will never capitulate to the rapacious so-and-so's at the Evil Empire, that market consolidation is a losing proposition for the public, that the deal will NEVER go through. Nevertheless, market speculation on Yahoo! and MS stock drives up share prices.

April, 2008 - Over the past month, the MS bid for Yahoo! has risen another 30%, to a net of nearly $58 B (billion), keeping ahead of the speculative price rises and nominal Yahoo! value. All of the fuzzy warm sentiments about corporate independence, freedom, mom, baseball, and apple pie go by the wayside, as money talks. At a hurried and hastily organized Yahoo! shareholders meeting, the merger-buyout is accepted.

May, 2008 - Financial reporters start to speculate why there has not been much discussion about these events - the rush-rush shareholder meeting, for instance. Why was there not a bigger brouhaha? Attempts to reach investors for comment are largely unsuccessful, but no one in the public seems unhappy about the stock turnover and resulting profits (remember - money talks, happy investors don't). Grumbles are starting to come in from Yahoo! advertisers, web surfers, account holders, email users and so on, complaining about a downturn in service, restrictions on downloads and file attachments, restricted access to certain websites, and so on.

October, 2008 - There were concerns about a possible US recession beginning in early 2008. That has become a reality - not severe, but enough for businesses worldwide to delay all IT purchases - hardware, software, and training. What sales are out there are requesting Windows XP. MS, rather than making a cash sale on a product that people want, sticks to its bubble guns and tries to ram Vista down people's throats. Businesses don't swallow. Instead, there is a sudden upsurge in open source solutions - Linux, OpenOffice, Firefox, and so on, as well as corporate management tools based on Apache and others. Reports in February 2008 reported a 26% increase in corporate open source solutions in the preceding year - a meteoric rise that correlates with the release of Vista - and current estimates are that the adoption rate will increase even more this year.

November, 2008 - Prior to the MS-Yahoo! buyout, MS was considered to be in a safe position, with cash reserves bigger than most countries. The stock swap and buyout changed that, with MS having depleted 95% of cash reserves on this transaction. With OS and office programming sales at all time lows, many are asking where is the revenue, where is the cash, and why aren't investors talking this up? A lot of investors must have become very wealthy with the buyout. Where's the little guy? the fund manager? the SEC? Names like Enron, Comcast, and Adelphia start appearing in the same sentence as Microsoft.

January, 2009 - MS demos a Vista 7 pre-beta at the Consumer Electronics show (CES). It is built on MS'es new slim multi-platform kernel - MinWin. Skeptical observers, burned on Vista and legacy MS tactics, are pleased to see that the system looks good - damn good in fact - lean, fast, seemingly non-buggy, with legacy features that disappeared from Vista, but that consumers want. The buzz is great for MS. Stock prices trend up. Hardware vendors and app developers start to applaud the New Age of Microsoft. Hardly anyone can wait for the official release aiming for November 2009.

March, 2009 - An MS engineer spills the beans that Vista 7 is having problems. The CES demo was a sham. MinWin, while quite meritorious and technological sound in principle, was not ready for demo by the January show. The demo was a thinned out version of NT, modded just enough to look like Aero, and to run a version of DX10. The demo was just a sparkle-and-glitter app on top of NT 2000, not the actual MinWin kernel. While MinWin will actually be based on NT technologies, it seems that MS does not have sufficient software engineering staff to implement a new OS rewrite. Huh? That's what the MS whistle blower reported. The allegation is that with product revenue down, and cash reserves way down, MS has quietly started a round of downsizing, focusing on what it perceives to be best bet revenue producers such as Windows Server, or its most holy grail obsessive objectives like search engine and advertising supremacy. Industry analysts and consumers alike muse over the reports, but conclude that these are the words of a disgruntled layoff. Back to business as usual.

August, 2009 - A major survey is reported on the status of previous Yahoo! users, prompted by reports of dwindling numbers. 65% still use the service, but they report no special allegiance. Respondents listed alternative service that they would sign up for if Yahoo! or MSN disappeared. Seems that not too many people have significant loyalty to a web service name brand. If one provider disappears, there are many alternatives.

September, 2009 - Further reports confirm that Google maintains its lead in search and advertising services. Other services, such as AOL and NetZero, small players in comparison, nevertheless report unexpected increases in business, attributed to defections from the service-dwindling and technology-dwindling state of Yahoo! and MSN.

November 2009 - The initial date for Windows 7 release comes and goes. Typical MS activity it seems - until more employees at MS start to make allegations similar to those described above. It's a bluff they say, that MS is defunct, its core engineering staff decimated by layoffs or defections to Google, Sun, IBM, and various Linux value-added application developers.

January 2010 - Windows 7 is actually released, with the official name Windows Smokescreen. Buyers try it. They are underwhelmed. It is kinda like NT, kinda like XP, kinda like Vista, but with more bugs than an ant farm. MS says that it is the perfect OS everyone always wanted. Wall Street answers in kind, and MS shares tumble.

February 2010 - Six months prior, a group of ex MS employees formed a new company, Cabernet - having bought development rights to Wine. This month, they released a low cost Linux app, an NT-XP virtual machine, retailing for $14.95. It is proven to run nearly every Windows app that was originally written to official MS Windows specs. While nobody in their right mind would actually want to run MS Bob on a real computer, you could if you wanted to. This is the proverbial KILLER APP for Linux, and everyone knows it, instantaneously. Within the next month, nearly all computer vendors are offering Linux-Cabernet instead of Windows with new PC sales, including OpenOffice and a huge suite of quality open source apps - for free. The cost of the average new PC drops on average about $600. Apple, reporting a sudden and definitive drop on new system sales, licenses Cabernet for its own platform. MS execs, as usual, remain characteristically secretive and tight-lipped about the situation.

March 2010 - Watergate! A major financial newspaper reports on the finances at MS, and it ain't good. A DeepThroat secret contact helped investigative reporters find evidence that MS corporate reports and filings with the SEC were doctored - or butchered - to hide illicit activities beginning before the MS-Yahoo! buyout. The public market capitalization of Yahoo! had been quietly decimated in the year or two before the merger. While it still appeared to be a publicly traded company, many apparent Yahoo! investors were actually money laundering fronts that had quietly acquired a huge, nearly total position in the company. These sham investors were MS and Yahoo! principals. When the MS-Yahoo! deal closed, nearly all of the MS cash reserves slipped quietly and surely into the pockets of those key stockholders. There was no public outcry or concern, because there was no public, only the illusion of a diversified shareholder base.

April 2010 - And that dear reader, brings us current. The bomb dropped just a few days ago. The public outcry and official investigations have just barely begun. And today . . . well, you know the current news . . . MS seems to no longer exist. Attempts to contact key executives have failed - Gates, Ballmer, the whole lot of them. Gone it seems. In fact, those close to the situation say that these key people have been "on vacation" or "at meetings" for a week or two, so no one quite knows.

What does it mean for the public? Time will tell, but surprisingly, perhaps not much. Installed software still works. New systems can boot just fine into MacOS or Linux or pirate versions of Windows (recommendation - buy-buy-buy Chinese "software companies" - now that's funny, I don't care who you are). Google and distributed apps are doing just fine thank you. Open source is flourishing. So, so what? Are you incensed and outraged? To be honest, so are we - because we all hate cheats and liars. But our computers still work, and we remain as productive or entertained as ever with the apps we love. Good RIDdance MS (Rest In Damnation). We shan't barely shed a tear for ye.

And in perhaps related news - today there are reports of unprecedented and inexplicable on-the-ground activity in California's Mojave Desert, at Scaled Composites, the aerospace company that built and flew SpaceShipOne, the first private spacecraft to achieve suborbital flight and win the AnsariX prize, in 2004. The company announced in 2007 a partnership with Virgin Atlantic, to go into fleet production of SpaceShipTwo, to commercialize private human spaceflight. The venture is well along the way, with a confirmed multi-vehicle fleet, launch systems, and extended-mission human support and habitation systems. Microsoft cofounder Paul Allen is a prominent investor in this enterprise. Perhaps the MS-Yahoo! execs thought - rightly so - that there would be no place on earth to hide from the law. Windows Moonbeams anyone? MarS Windows Server 2112?

It is not all bad (0)

Anonymous Coward | more than 6 years ago | (#22273092)

Google and the Mozilla Foundation both compete well with Microsoft in a few areas and both make truckloads of cash. Microsoft needs this so it can eventually stop being treated like a monopoly. This would let Microsoft bundle their software however they wish.

Re:It is not all bad (0, Redundant)

mordors9 (665662) | more than 6 years ago | (#22273184)

I still have a Yahoo! home page that I visit on a daily basis. If Microsoft buys them, I will quickly delete that bookmark and will never visit it again. I would highly doubt that I would be alone in that either. Google and Mozilla haven't alienated large groups of people (Google seems to be working on it at times) the way Microsoft have. So I don't think this is going to turn out to be such a great thing for them. Kind of like AOL. Look how valuable that looked to TW, how did that turn out?

Re:It is not all bad (2, Interesting)

richg74 (650636) | more than 6 years ago | (#22273504)

I also have a Yahoo! home page that I look at many times a day. (I like it as a way of aggregating news headlines from different sources, along with market indicators, exchange rates, etc.) Although I don't have a very high opinion of Microsoft, I won't necessarily abandon it just because the deal goes through. But my expectation is that it won't be long before Microsoft manages to screw up the good parts of Yahoo! MS doesn't know how to run a Web site (of course, using Windows does give them a considerable handicap) -- try comparing the response times of ???.microsoft.com to Yahoo!, never mind Google.

And the idea that somehow a combined Yahoo! and Microsoft will be able to take on Google in search and advertising must be one of those faith-based initiatives. Two times clueless is still clueless.

Re:It is not all bad (1)

pherthyl (445706) | more than 6 years ago | (#22273674)

Google also has personalized home pages where you can throw news boxes or RSS feeds or gadgets together on one page, in case you want to switch at some point. http://www.google.com/ig [google.com]

Re:It is not all bad (1)

HouseOfMisterE (659953) | more than 6 years ago | (#22273694)

The exact same thought was going through my mind when I read your post. I currently use "My Yahoo!" as my homepage, and almost always use Yahoo for my web searches, but would change both of those things immediately if Microsoft acquired Yahoo. I think that I would try to switch to Ask.com, though would probably end up using Google.

yes I agree (-1, Offtopic)

Anonymous Coward | more than 6 years ago | (#22273110)

The head of the Galactic Federation (76 planets around larger stars visible from here) (founded 95,000,000 years ago, very space opera) solved overpopulation (250 billion or so per planet, 178 billion on average) by mass implanting. He caused people to be brought to Teegeeack (Earth) and put an H-Bomb on the principal volcanos (Incident II) and then the Pacific area ones were taken in boxes to Hawaii and the Atlantic area ones to Las Palmas and there "packaged".

His name was Xenu. He used renegades. Various misleading data by means of circuits etc. was placed in the implants.

When through with his crime loyal officers (to the people) captured him after six years of battle and put him in an electronic mountain trap where he still is. "They" are gone. The place (Confederation) has since been a desert. The length and brutality of it all was such that this Confederation never recovered. The implant is calculated to kill (by pneumonia etc) anyone who attempts to solve it. This liability has been dispensed with by my tech development.

One can freewheel through the implant and die unless it is approached as precisely outlined. The "freewheel" (auto-running on and on) lasts too long, denies sleep etc and one dies. So be careful to do only Incidents I and II as given and not plow around and fail to complete one thetan at a time.

In December 1967 I knew someone had to take the plunge. I did and emerged very knocked out, but alive. Probably the only one ever to do so in 75,000,000 years. I have all the data now, but only that given here is needful.

One's body is a mass of individual thetans stuck to oneself or to the body.

One has to clean them off by running incident II and Incident I. It is a long job, requiring care, patience and good auditing. You are running beings. They respond like any preclear. Some large, some small.

Thetans believed they were one. This is the primary error. Good luck.

I think MS really SHOULD improve that ... (5, Insightful)

QuatermassX (808146) | more than 6 years ago | (#22273128)

search algorithm ... it would certainly help make the "service" an actual service! Over the years I've watched as Microsoft has released meh product after meh product. Isn't that their real problem - when the vendor lock-in wears off, they have DAMN weak products.

I have never understood the popularity of Windows with consumers (beyond the obvious monopoly power they wield with personal computer manufacturers), I find their software mostly blech (frankly, anything NOT Word and Excel is just junk) and their online products and services NEVER work as advertised. NEVER.

If I were Microsoft, I'd try and refocus the company culture and align it with the interests of its customers and not ... well ... whatever hellish alliance of businessmen, content producers and bean counters they're currently serving.

I think the XBox 360 points the way, really ...

Re:I think MS really SHOULD improve that ... (2, Insightful)

MonoSynth (323007) | more than 6 years ago | (#22273356)

If I were Microsoft, I'd try and refocus the company culture and align it with the interests of its customers
The 'customers' in the search engine industry are the advertisers, and the main interest of advertisers is reaching as many consumers as possible. A perfect search portal with a perfect algorithm doesn't work. Buying the world's number two might work.

Re:I think MS really SHOULD improve that ... (5, Insightful)

filbranden (1168407) | more than 6 years ago | (#22273626)

A perfect search portal with a perfect algorithm doesn't work.

This isn't about the search algorithm. Microsoft is clearly after Yahoo's user base and users that go to Yahoo for search. For what it's worth, they could scrap Yahoo's search algorithm completely, replace it with MSN, as long as they believe that users will still go to Yahoo after that.

Of course, Microsoft has done that before. Look at Hotmail for instance. They couldn't stand the fact that it was not Microsoft technology under it, so they just had to "improve" it on their way. Results? After Microsoft's "improvement" Hotmail ceased to be #1 in webmail and now must be around #957 in market share.

It's probable that if they finally buy Yahoo it will be just the same. Users will deflect in masses. First it will be the users that leave Yahoo because they don't trust Microsoft (say around 5-10%), then it will be the users that leave Yahoo because Microsoft "improves" the service with their own ways of "improvement" (say around 10-20%), and finally it will be the users that leave Yahoo because Microsoft will introduce its silly single platform locked-in technologies, like Silverlight, and they will try to integrate Yahoo with the desktop, which will make Yahoo no longer as "convenient" it is from the point of view that you can access it anywhere without restrictions (say around 20-40% users leaving because of this).

In the end, Yahoocrosoft will lose from 35% to 70% users, and Google will be a yet bigger #1 with a distant #2. I think Microsoft buying Yahoo will be bad for the search/ads market, but it will be good for the OS/desktop/browser market, because Microsoft will certainly weaken from this. I think it's worth to give Google that much power if we get rid of Microsoft in the process, so I'm happy with this and I actually want it to happen, as much sorry I am for Yahoo, but hey, if they take the bid, they're just asking for it.

If I were Microsoft, I'd try and refocus the company culture and align it with the interests of its customers

Yes! Exactly my point. If Microsoft tries to think "as Yahoo does" and doesn't intervene that much, it could use its money and power to actually make it grow and defy Google. But Microsoft is too clever! They'll want to turn Yahoo in Microsoft, they'll want to use their MSN knowledge to grow Yahoo. They'll want to "improve" Yahoo services by migrating them to Windows servers (as with Hotmail), they'll want to "leverage" the desktop on Yahoo services. That will be their biggest mistake. But it's inevitable, there's no way that Microsoft will buy Yahoo and not do that.

Mod up please (1)

Weaselmancer (533834) | more than 6 years ago | (#22273706)

I'm without mod points at the moment, and this guy is spot-on.

With a recession, ad buys with #2 get cut. (4, Insightful)

tomhudson (43916) | more than 6 years ago | (#22273680)

The 'customers' in the search engine industry are the advertisers, and the main interest of advertisers is reaching as many consumers as possible.

And in a recession, advertisers scale back their ad buys. Instead of buying in the top 2 in any market, they buy from #1 only. Even Microsoft admits that Google is #1.

Re:I think MS really SHOULD improve that ... (1)

Daengbo (523424) | more than 6 years ago | (#22273368)

I think the XBox 360 points the way, really ...

Four letters: RROD ....

Re:I think MS really SHOULD improve that ... (4, Informative)

KokorHekkus (986906) | more than 6 years ago | (#22273424)

Except that the Xbox and Xbox 360 has been major economic sinkholes. From 2002 to 2004 the then Home and Entertainment Division made an accumulated loss for 3.5 billion dollars. From 2005 to 2007 the new Entertainment and Devices division made an accumalted loss of 3.7 billion dollars. So over those 6 years they lost 7.2 billion dollars. Imagine how hard it will to make that money back (plus the lost interest on it) from a division that has a 6 billion revenue per year and never has shown a profit.

Microsoft has tried several directions when it comes to break into new markets but let's face it, they haven't done a very good job of it. Their money comes from the Server and Tools Division and the Business Division (Office etc.). And I don't think it's going to change... perhaps because they aren't used to competing on merits alone.

2004 10-K (has the 2002 to 2004 numbers) http://www.sec.gov/Archives/edgar/data/789019/000119312504150689/d10k.htm [sec.gov] 2007 10-K (has the 2005 to 2007 numbers) http://investing.businessweek.com/research/stocks/financials/drawFiling.asp?docKey=136-000119312507170817-22AR89VDNH3I307BANT6DSD928&docFormat=HTM&formType=10-K [businessweek.com]

Re:I think MS really SHOULD improve that ... (1)

dotancohen (1015143) | more than 6 years ago | (#22273556)

Actually, MS Office 2007 is a great improvement. If it would run on Ubuntu (and save in odf format without the stupid non-working plugin) then I would pony up the money for it. Media Player, up to version 10, was a great program as well. All they need to do is refocus and get a decent operating system out the door to save themselves. And no, I haven't used MS software in my house for over two years. But not because I hate them.

Re:I think MS really SHOULD improve that ... (1)

DiarmuidBourke (910868) | more than 6 years ago | (#22273582)

I was just thinking the same thing when reading the article.

People use microsoft products because of the monopoly, not because they are good products. What microsoft need to do online is to stop being d***s to their consumers and realise that online consumers dont want to be bombared with adverts for other microsoft products, they just want a product that aids the user to complete what they want to do, like what google does with search.

They seem to be stuck in the idea that their monopoly on Windows is going to be able to push their online service. They need to change that to their public image being able to push their online services. Yahoo had a good public image, until then they started getting envious of their new competitor Google, who were all cheery and happy.

The bid is public ... so (4, Insightful)

Gopal.V (532678) | more than 6 years ago | (#22273134)

I think the public nature of the bid suggests that private behind-closed doors negotiations have failed and they're trying to attempt a near-hostile takeover. YHOO [yahoo.com] shares have jumped about 10 USD over friday and a lot of us have been getting rid of them. And I wonder who's buying all of these, in reality? Someone who'd pay 31 dollars for a share, when they could instead buy it in-market at 28?

I'd really hope it was some sort of last-ditch effort to put shareholder pressure onto Jerry Yang (yes, I do work at Y! and I do have a very nice job [php.net] , which I'd be really sad to leave ...). And yeah, read my domain to figure out exactly why I would have to :)

Here's to hoping that it doesn't happen (for YUI, flickr, freebsd, hadoop and del.icio.us!)

Re:The bid is public ... so (3, Interesting)

Anonymous Coward | more than 6 years ago | (#22273202)

I made a comment over on another site about hoping that the buyout doesn't happen, specifically because of what Microsoft would do to the useful software/services that Yahoo! has built up and acquired (Y! mail, flickr, del.icio.us). Someone else responded with a "Quit being so childish. Look at all the money they'd make!" comment that quickly got modded up. The sad truth, however, is that one of the major assets that MS is buying is the customers, and if the buyout goes through, quite a few customers will leave. After all, many of us went to Yahoo! after being dissatisfied with the services that Microsoft offered.

Re:The bid is public ... so (1)

Gopal.V (532678) | more than 6 years ago | (#22273220)

Just for the record, I'm on vacation and out of office (well, I'm on the wrong side of the equator from office).

So, my comment is completely uninformed, baseless speculation (wishful perhaps too).

PS: thanks to the dude who pinged me and told me to shut up :)

More than near-hostile... (5, Interesting)

DTemp (1086779) | more than 6 years ago | (#22273274)

Here is a quote from the letter Ballmer wrote to Yahoo:

Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo!'s shareholders are provided with the opportunity to realize the value inherent in our proposal.

That sounds like a full-fledged hostile takeover threat to me... "we can do this the easy way, or the hard way."

I think we can all agree that what Microsoft needs most is a complete change of corporate culture, not Yahoo. This would require a complete replacement of at least 80% of the Microsoft brass, however, so it's not likely to happen until the company is near-dead.

However, if Microsoft realizes that they need to change their corporate culture to attract a bigger audience/customer base, but doesn't want to go through the hassle of actually doing it, then theres one VERY EASY way to impart this realization onto the purchase of Yahoo: for the love of fucking god, DONT FUCK WITH YAHOO!! That means: no changing their servers from FOSS to Windows, no firing all of their managers, and no adulterating Yahoo's way of doing things with Microsoft's shittastic attitude (among other things).

Re:More than near-hostile... (4, Funny)

Dystopian Rebel (714995) | more than 6 years ago | (#22273722)

for the love of fucking god, DONT FUCK WITH YAHOO!!


Unfortunately, at the end of the letter under his signature, Ballmer wrote in ballpoint pen, "Microsoft reserves the right to fuck with Yahoo."

Re:The bid is public ... so (1)

DerekLyons (302214) | more than 6 years ago | (#22273560)

I wonder who's buying all of these, in reality?

Probably short term speculators and day traders looking for a quick in and out profit. (Or, possibly Yahoo has one or more white knights.)
 
Actually, at current prices, buying YHOO and taking the cash (or the conversion) yields a small profit

I Hate Bill Gates (0, Flamebait)

Anonymous Coward | more than 6 years ago | (#22273138)

He makes me want to puke. He is an asshole.

Microsoft software sucks. It is retarded.

Re:I Hate Bill Gates (1)

pclminion (145572) | more than 6 years ago | (#22273578)

Well, if somebody makes a bid like this for a publicly traded company, what exactly is supposed to happen? The only way to prevent it is through complete solidarity of the shareholders.

This is what you get when you go public.

WOOT!! Micro$oft near death (0)

Anonymous Coward | more than 6 years ago | (#22273140)

What with Windoze Vi$ta and Office 2007 both being a failure, X-Box 360 hemorrhaging money from Micro$oft, and Zune being a total failure; no wonder Micro$oft is on the ropes. Now the only good thing left to happen to Micro$oft is for them to go totally out of business, forcing everyone to go to free software.
____________________________________
Friends don't help friends install M$ Junk.

Regulators? (3, Informative)

TubeSteak (669689) | more than 6 years ago | (#22273142)

Will the regulators let this happen?
If MS buys Yahoo, the top 5 search engines will becomes the top 4.

Not to mention that many of the 2nd tier search engines are "powered by" Yahoo & MSN

Re:Regulators? (1)

Wowsers (1151731) | more than 6 years ago | (#22273270)

Will the regulators let this happen?
If MS buys Yahoo, the top 5 search engines will becomes the top 4.
Microsoft a top search engine. Hmmmm, if you say so ;-).

Using the warchest (0)

blind biker (1066130) | more than 6 years ago | (#22273148)

So, Microsoft is using its massive cash reserves to monopolize one more market? I for one hope they fail. Microsoft just can't seem to make a dime unless they utterly dominate a market. What next, genetic engineering? I heard that's the next big thing, but I'd hate to have MS meddle there, as well. The broken DVD players on the Xbox 360 just make me think they'd do a half-buttocked job at anything.

Seriously though: if MS overtakes the online business, there's no stopping them. They'll make back the $40 billion in no time and then some, and will point their greedy sight at yet another profitable market. Given enough money you can monopolize any market.

Re:Using the warchest (0, Interesting)

Anonymous Coward | more than 6 years ago | (#22273194)

Okay genius you figured them out I guess. Microsoft can't do anything without a monopoly in a market otherwise they would compete with Google another way.

So why is it that Yahoo, Ask.com, and every other competitor is not able to compete with Google either. They are not all evil monopolies.

This is a business move to complete with Google. Ranting little posts about monopolies are just retards bitching.

Re:Using the warchest (0)

Anonymous Coward | more than 6 years ago | (#22273304)

Seems like the price was more like $80-100 billion when Microsoft was rumored to be making an offer a year or two ago. People were asking, is Yahoo worth $100 billion to Microsoft? At $45 billion the answer is obviously yes.

That's not a compliment to Yahoo's recent senior management.

Microsoft is always worried (0)

Anonymous Coward | more than 6 years ago | (#22273156)

They are described as paranoid about the competition.

Maybe that's why it has been many years since they've provided fodder for these "imminent doom" stories that slashdot loves to post. And worried, on the ropes MS is still here and still standing and still playing the game better than almost anyone.

In the early days it was IBM (2, Informative)

VampireByte (447578) | more than 6 years ago | (#22273200)

In the '80s Microsoft was constantly, and justifiably, worried about IBM, which was a huge powerhouse in those days. Google is not the first serious competitor that Microsoft has faced, IBM could have crushed them 20 years ago.

Re:In the early days it was IBM (1, Interesting)

Anonymous Coward | more than 6 years ago | (#22273260)

The difference is that Google is forwarned. They know that they cannot partner with Microsoft any more than a mongoose can partner with a snake. It's kill or be killed. Microsoft has only ever succeeded in taking out those it caught unawares (compare Borland with Oracle).

Re:In the early days it was IBM (1)

A nonymous Coward (7548) | more than 6 years ago | (#22273570)

The bigger difference is that Microsoft's competitor was glacially slow, far behind Microsoft in terms of up to date tech, and didn't have a clue how to catch up even if they had the means.

Whereas Google's competitor is glacially slow, far behind Google in terms of up to date tech, and doesn't have a clue how to catch up even if they had the means.

Re:In the early days it was IBM (2, Interesting)

Alien Being (18488) | more than 6 years ago | (#22273664)

"IBM could have crushed them 20 years ago."

I disagree. In 1988, IBM was trying to gain some control over the monster it had created by collaborating on OS/2. It didn't work. Gates realized that control of the desktop API was MS's biggest asset so he canned the IBM deal and launched the NT project.

Gates was right, but he did overestimate the importance of the API. He thought that he could beat the Internet with a proprietary MSWindows network. It took several years for him to realize his mistake, bundle TCP/IP and embrace the Net. They used their desktop monopoly to promote IE to dominance of the WWW. Then they tried to turn the Web inside-out with various tricks like Active-X.

MS cannot be crushed, but IMO they are likely to self-destruct. I hope we're witnessing that now.

MSFT is learning ... (1, Insightful)

Anonymous Coward | more than 6 years ago | (#22273160)

what it's like to compete in a more open field. Since they can't force Windows users to use MSN Live, they're not getting any sort of business they wanted.

Frankly, I'm glad. Maybe 10 years from now we'll be buying individual software products from MSFT (like say Visual Studio) without the excess baggage they current force on people (e.g. vista).

wait (2, Funny)

ionix5891 (1228718) | more than 6 years ago | (#22273162)

so who do we hate this week here on /.

microsoft or google?

Re:wait (2, Funny)

Obsi (912791) | more than 6 years ago | (#22273214)

We have always hated Microsoft here at /..
Next week, though, we'll have always hated Google.

Competition is always good (0, Troll)

Opr33Opr33 (1180091) | more than 6 years ago | (#22273164)

I'm not a big fan of either Microsoft or Yahoo(gmail user)but a MicroHoo will be in a better position to compete with Google. Which is good in that it will force/encourage/scare Google into further innovations. Say what you will about Microsoft but if they are committed to this (meaning they will continue to throw time and money at it) they can be a market force. The original X-box brought a lot of naysayers but look at the 360. Everyone laughs at the Zune but they continue to improve it and more importantly drop the price. Americans are first and foremost cheapskates.

Re:Competition is always good (1)

ScrewMaster (602015) | more than 6 years ago | (#22273384)

Americans are first and foremost cheapskates.

Huh. And I was wondering why the iPod was so successful.

Re:Competition is always good (1)

A nonymous Coward (7548) | more than 6 years ago | (#22273588)

So you are saying that, what, version 3.0 of whatever huge buyout they try will actually be useful? That they will screw up Yahoo and make it useless and laughable, that the next buyout will show promise after a while, and that the buyout after that will actually be useful.

Huh. I don't think they can afford two more of these $44B buyouts.

Microsoft vs Google (2, Insightful)

perlchild (582235) | more than 6 years ago | (#22273168)

I wonder if any of Google's customers go there because it's more competitive, has better mindshare, etc... Or if a part of Microsoft's insuccess lies in its reputation, etc... Meaning if they are trying to go anywhere but Microsoft, merging with Yahoo would just doom Yahoo too...

Any thoughts?

Microsoft failed the minute (5, Insightful)

Progman3K (515744) | more than 6 years ago | (#22273178)

they stopped giving what the CUSTOMER wants.

Whenever you push an agenda different from the client's, the client walks.

SOP (5, Insightful)

the_skywise (189793) | more than 6 years ago | (#22273186)

This has always been Microsoft's way. They bought "Word" and (depending on how you interpret it) they bought "Dos".

Not 10 years ago people were proclaiming the death knell for Microsoft because it missed the internet... then they bought "Internet Explorer" and... well you know how that turned out.

Microsoft has always made stumbles. Where they've excelled is their resilience to find the right solution and implement it in a good enough/cheap enough fashion that it doesn't make sense to buy the other guy.

Can they do this against Google? From a customer stand-point I'm not sure. I'm not just going to use Microsoft Search(tm) over Google so long as Google remains free and provides decent results. So Microsoft can't really win there. But they can steal ad revenue from Google by making their business/web-ads side more appealing to businesses. Get that, control the ad market and you'll be able to embrace and extend Google...

But this is a sign that Microsoft is "failing"? Not on your life...

Re:SOP (1)

Alomex (148003) | more than 6 years ago | (#22273370)

They bought "Word" and (depending on how you interpret it) they bought "Dos".


They didn't buy Word and anyway you interpret it, they bought Dos from Patterson (for about $50K upfront, and eventual payments of $500K to resolve some licensing issues later on).

then they bought "Internet Explorer" and... well you know how that turned out.

They bought the code base of Spyglass. They would have been better off starting from scratch, so the first IE based on Spyglass was a joke, the second IE based on internal development efforts was much better.

Re:SOP (4, Insightful)

waa (159514) | more than 6 years ago | (#22273460)

I once saw a site that had a detailed list of all the companies and the technologies that Microsoft has purchased over the years. The list was staggering...

In addition to DOS and Word that you mentioned, one thing that people might not know is that Microsoft bought a company called "Webcorp" in the '89-'91 range (I can not recall exactly). This company had created a rather slick Lantastic-like networking system on top of DOS. Being a BBS sysadmin (sysop in those days...) I was one of their beta testers and as a thank you for being a beta tester, I was always given the latest version of their software and watched it grow fro "functional" to "excellent."

long story short... Microsoft bought Webcorp and the Lan technologies they had created and hey... What do you know... Suddenly, out of Windows 3.1 was borne "Windows For Workgroups". Now with NETWORKING!... Another Microsoft triumph and INNOVATION...

The point of my long winded story? Microsoft is _NOT_ an innovator. Unless you define innovation as: a. Purchasing companies, or licensing technologies in order to incorporate them into an existing product or b. Purchase companies or technologies only to shelf said technology in order to promote their less capable, more buggy product.

I for one have been watching this endless cycle for years now (since '89 or '90) and have been fed up with it since just about that time. :(

Re:SOP (5, Insightful)

Khuffie (818093) | more than 6 years ago | (#22273656)

May I ask...who cares if Microsoft is not an innovator? In your example, Microsoft recognized a technology that, per your admittance, is excellent. So instead of them developing their own networking system for Windows, they realized that incoporating an already developed and tested system is far better for them and their users.

Everyone purchases other companies or licenses technologies from them. Guess what? OS X? Built off BSD and NextOS. Safari? Built off webkit. Google purchased Picasa, Sketchup and Earth Viewer (ie Google Earth). This 'endless cycle' you speak off is not limited to Microsoft.

Re:SOP (1)

RattFink (93631) | more than 6 years ago | (#22273704)

Not 10 years ago people were proclaiming the death knell for Microsoft because it missed the internet... then they bought "Internet Explorer" and... well you know how that turned out.

It turned out not that great for them, the part where they actually make money, the server market has played out miserably for them because of that mistake. Yes they do have a high install rate of the browser but that is only due to aggressive bundling of it in windows, something that you cannot do with a search engine.

Want to know why Google is beating MS? (1, Interesting)

christurkel (520220) | more than 6 years ago | (#22273206)

Want to know why Google is beating MS, I mean besides the fact their search engine rocks?

Google gives you all this cool stuff for free, with minimal ads, or none at all. Gmail, Google Chat, Google Earth, etc, and all its all class platform. They don't try to lock you into IE and Windows Media. It isn't perfect but its far better than MS which makes no effort.

On top of this is the perception that Google is a cool company that really looks out for its users. People see MS and wonder what pile of horse puckies will be next.

That's why Google is beating MS.

Re:Want to know why Google is beating MS? (2)

thewiz (24994) | more than 6 years ago | (#22273320)

Agreed. Don't forget, however, that Microsoft has a habit of MS-itizing everything they buy. Remember Hotmail? It originally ran on a Un*x-variant and Microsoft had many problems with the switchover to NT. Yahoo runs it's services on FreeBSD and Apache; I have the feeling that, if the deal goes through, we'll see similar issues. Doing so will probably drive YahooMS! into a lower rank or destroy it all together.

I'm hoping that Yahoo! sees the light and doesn't accept the offer, EVER!

Re:Want to know why Google is beating MS? (1)

drspliff (652992) | more than 6 years ago | (#22273508)

Honestly, I don't think they have a choice, they can either accept the offer.. or be witness to a hostile takeover.

Re:Want to know why Google is beating MS? (2, Interesting)

the_rev_matt (239420) | more than 6 years ago | (#22273366)

Actually I think it was Rob Enderle (of all people) on NPR this morning pointing out that Google has their ad network all over the web, whereas the Yahoo/MSFT portal model requires users to go to them. It's a merging of dinosaurs who can't adapt without starting over from scratch. Combined they barely have 20% of the market to google's 60%.

No need to innovate (1)

gilesjuk (604902) | more than 6 years ago | (#22273210)

Buy buy buy, Microsoft simply can't come up with a winning online service to rival Google, they have to buy the competition.

It makes you wonder if they should forget software and make more hardware as the XBox 360 is fairly popular. But given the failure rate on the early 360s it would probably lose them even more money in warranty claims.

They're still living in the 1990s, they'll have to cut costs and start to shrink the company, it won't grow and make substantial profit for shareholders. Ballmer further tarnishes Microsoft's image.

Overconfidence (4, Interesting)

Alomex (148003) | more than 6 years ago | (#22273212)

Microsoft has been overconfident in its approach to the internet from day one. First by believing they could deploy an alternative, then ignoring the Netscape threat early on instead of buying them outright (back when they were still up for sale for a few hundred million). They repeated the same mistake with the search engine market, with a myriad of failed search engine initiatives from within rather than buying outright an external player.

About a decade ago, Microsoft balked at paying $8M for one of the key players, about three years ago, they were wincing at spending $20M in a decent search engine effort. "You'll end up paying billions for a search engine company if you don't spend this money now", was my advice. They didn't listen and here we are $46 billion dollars later after the FAST and Yahoo! acquisition.

Re:Overconfidence (1)

vcalzone (977769) | more than 6 years ago | (#22273498)

Absolutely. Their unceasing quest to defeat Google and Apple has only hurt them in the long run. I remember a Slashdot poster a long time ago that said they'd be better off to give up and focus on their software, and they were correct. The new versions of their flagship software seem as if they completely ignored user input, and I have to think that they've got a great deal of their HCI focus on the Internet game. Rather than trying to reinvent the wheel as a sphere, they should be focusing on fixing those squeaky axles and making the car run smarter and faster. If MS came out with a new version of Windows that used up LESS memory, that ran faster but utilized new features and the latest in design techniques, they would have no troubles reasserting their place at the forefront of the industry. They'd sell tons of copies simply because they're already on the top of the game and it would be a serious improvement. But while trying to beat Apple at the interface game (which they can't win, because Apple is passionately devoted to just that), they're losing the war. Microsoft would do better to listen to Kanye West: "Harder, Better, Faster, STRONGER!"

Salon had a very similar piece today (4, Insightful)

Scareduck (177470) | more than 6 years ago | (#22273246)

Salon had a very similar piece today [salon.com] in its "How The World Works" column by Andrew Leonard. Leonard can be a very dogmatic statist when it comes to economic policy, but I think he pretty much nailed the tenor of this deal:

Except that this Microsoft bid, made at the late date of February 2008, even if it can't be considered a move made out of desperation, is at the very least a move generated by massive frustration. Try as it might, Microsoft cannot gain ground on Google -- the company that currently claims ownership of the soul of Silicon Valley [salon.com] (as in -- we can have fun and make a bazillion dollars). So where once a Microsoft bid for Yahoo would have been seen as presaging the long-awaited total triumph of Gates and Co. over the freewheeling Valley, now all it does is prove that winning every battle it fights is no longer a Microsoft birthright. Microsoft is playing catch-up from further behind than ever. The future requires a major beachhead on the Web. Microsoft, after at least a decade of Herculean effort, still doesn't have one. So it wants to buy the biggest one it can find.
I wonder what effect a Microsoft buyout of Yahoo would have on various open-source initiatives Yahoo is involved in. Microsoft wouldn't be so dumb as to kill them off immediately -- that would be bad press, and possibly invite retaliation from the next Attorney General -- but their history at Hotmail indicates a revulsion to all things open source.

Re:Salon had a very similar piece today (1, Insightful)

Anonymous Coward | more than 6 years ago | (#22273510)

I wonder what effect a Microsoft buyout of Yahoo would have on various open-source initiatives Yahoo is involved in. Microsoft wouldn't be so dumb as to kill them off immediately -- that would be bad press, and possibly invite retaliation from the next Attorney General

That was a good joke! We can trade humorous but completely irrational expectations of Microsoft all day!

Then we can both duck as the chairs fly. They'll probably be ejection seats with open source developers at Yahoo! strapped into them!

Ballmer's in charge (5, Insightful)

MLCT (1148749) | more than 6 years ago | (#22273282)

He is now in the driving seat. While MS have always bumbled along with things I now see this getting a bit personal and a bit more precarious. Ballmer is an interesting character. A lot on here (probably rightly) have characterised him as mental. He seems like a deranged and obsessed guy. I mentioned MS "bumbling" along because that is what they did under Gates (sure they embraced, extinguished), but they never took vast risks. Now that Ballmer is in charge I can't shake the feeling that MS's future is a lot more risky - for Ballmer's personal obsession with "destroying" Google could take MS into a very different neighbourhood from Gate's more careful approach. Ballmer is now starting to risk the family silver on beating Google. You only have to look at the comments from the conference call yesterday to realise it - "The market continues to grow, and the leader continues to consolidate position," - never mentioned them by name, but he is clearly obsessed about Google - if I were a shareholder I would be worried that his personal obsession is impairing his business decisions.

Re:Ballmer's in charge (1)

Shados (741919) | more than 6 years ago | (#22273380)

Correct. Average slashdotters may agree, but aside for the whole monopolist part (which, I'll agree, is a pretty big issue), Microsoft has been a decent company, deliver quite a few decent products (2 bads for each good, but the good ones are really good), and I can't shake the feeling that Ballmer is going to make em lose it all. Beating Google is just not worth it. Stop it Microsoft.

Google will gain more than Microsoft (1, Interesting)

Anonymous Coward | more than 6 years ago | (#22273288)

I remember giving an interview for Yahoo in India and from whatever devs I spoke to the impression I got was they were uber proud of Perl and BSD and more or less rabidly anti-Windows/VC++/.NET. If Microsoft aquires Yahoo I'll bet anything most of the smarties there will leave Y! and jump right into Google's lap.

In this day and age when skilled manpower is in huge demand, this will be a serious blow for MS.

(YHOO+MSFT) = $6.5 bn loss in value (4, Interesting)

G4from128k (686170) | more than 6 years ago | (#22273292)

Looking at the market's response to this announcement, it seems that the merged YHOO+MSFT are worth at least $6.5 billion less than they were as separate entities. Yesterday MSFT lost $19.3 billion in market cap, but YHOO only gained $12.8. (If you factor in NASDAQ's overall rise, then these numbers are even worse -- suggesting perhaps a $9 billion loss of value from the merger.)

What if Google bought Yahoo first? (0)

lems1 (163074) | more than 6 years ago | (#22273302)

Would Google become a super giant in the online business if it were to buy Yahoo before MS? C'mon Google, beat them at their own game!

Re:What if Google bought Yahoo first? (1)

ScrewMaster (602015) | more than 6 years ago | (#22273462)

Why? The odds are great that the combined Microsoft-Yahoo would be less of a long-term threat than either of them are now.

Ballmer wants to buy himself a chip in the big game. I'm not so sure it's going to work out like he's hoping it will.

MS should merge with ... (5, Funny)

iknownuttin (1099999) | more than 6 years ago | (#22273330)

Exxon Mobile. They're a bit more profitable than Google (ROE: 33.33% (XOM) vs. 22.74% (GOOG))and the synergy towards a truly evil empire would be achieved faster.

I think, I need to send my resume over to MS for the position of V.P. of Evil Strategy because they're just not cutting it anymore. I mean, really, Google is still around!? Geeze!

Maybe not on the ropes, but not in good health (0)

Anonymous Coward | more than 6 years ago | (#22273386)

While I'm not sure Microsoft is on the ropes, the Yahoo bid shows certainly that among other total or partial failures from them in the OS, software, hardware and entertainment field (Zune, Vista, Xbox360, Office 2007), they admit to have failed in the web and service market too. Think about how much Live Search was trumpeted during the past years. All that money poured on those projects, especially that wasted on the failed ones, will harm their monopoly.

THIiS FP FOR GNAA (-1, Offtopic)

Anonymous Coward | more than 6 years ago | (#22273414)

BSD had become that he 3ocuments

I feel sorry for Yahoo (1)

nizo (81281) | more than 6 years ago | (#22273428)

But is there any way possible Microsoft can buy Yahoo and not destroy it? Converting all of the Yahoo services to the Microsoft platform (just the red ink this will make Microsoft bleed boggles the mind), hordes of the employees being laid off or leaving, every open source project they currently support fleeing to greener pastures (hint Google, you might consider offering them a safe place to flee to?) And any service interruptions will cause viewers to go elsewhere (Google). Is there any way possible this takeover won't cause Yahoo value to take a steep nosedive, and be a huge bonus for Google?

Premature to be calling them "On the ropes" (1)

imasu (1008081) | more than 6 years ago | (#22273430)

As much as I would like to see them lose out to the Goog here, it's important to remember:

MSFT:
market cap: $283.4 billion
P/E: 17.32

Google:
market cap: $161.39 billion
P/E: 38.83

I wouldn't be calling them "on the ropes" just yet. Then again, I did just get those numbers from Google :)

schadenfreude for Microsoft and Giuliani (3, Insightful)

victorvodka (597971) | more than 6 years ago | (#22273442)

Their comeuppance is happening at the same time, so (when I'm not thinking consciously) I have trouble distinguishing in my mind the feeling of schadenfreude I feel for Microsoft (particularly the Vista OS) from the one I feel for Giuliani.

There's no way Microsoft can catch Google just like there was no way anyone could catch Microsoft. That train has already left. The only way to catch Google is for someone to develop something entirely new that can be dominated with new network effects. Something new like Facebook or Ebay.

MS a victim of what made it a success (2, Insightful)

C0vardeAn0nim0 (232451) | more than 6 years ago | (#22273448)

When microsoft started, it was a young company, with a new view of technology. they "got" that microcomputer toy thingie a lot better than traditional mainframe and minicomputer makers like IBM, DEC, honeywell, etc. this allowed them grow exponentially, based not only on their own capabilities, but also on the series of mistakes and fuckups of the competition.

well, now it's against them. now THEY are the "traditional" guys with a backwards vision of computers, while google, yahoo and - surprisingly - apple have a grasp of how people see the digital world. google and yahoo caters to the connected crowd, and apple to the people that sees digital gadgets as fashion statements, two things MS with can't get a foot on.

of, course, MS is not going away anytime soon, the same way IBM, unisys, bull and HP are still around. what they need to do is recognize that they're pretty much irrelevant in those two markets, find a stable but big niche and stay on it. we don't see HP or IBM making atempts on the on-line or digital fashion markets, yet they're still huge and profitable.

so, here's a tip for microsoft: leave online services and fashion for the likes of nokia, apple, google, yahoo, etc. and go take care of what you do well: corporative operating systems like win2k (the only version of windows i dare saying i liked) and office tools.

What you haven't heard (0)

Anonymous Coward | more than 6 years ago | (#22273458)

I think one of the most important things about this purchase is not being discussed. That is the patent yahoo owns for an online auctioning of ad space. This may be the single most important patent in the search engine revenue space. Google has to license this patent from yahoo to be able to use its current structure. I remember a few years ago google agreeing to license this technology from yahoo for a certain number of years. If MS buys yahoo they may be less likely to let google use this patent so they can capitalize on it themselves.

And who has the last laugh... (0, Flamebait)

locust (6639) | more than 6 years ago | (#22273478)

Boy, what can you say. XBox should have completely kicked PS3's ass. But despite the better games portfolio, and much higher US adoption rates, it was bleeding money... Which goes to show what happens when an software company tries to do hardware. Then there's HD-DVD. Someone at Sony is laughing his ass of right now.

Zune... lost and continues to lose to Apple.

Live looses to Google (and the web in general).

So here we are. The problem for MS at this point is that they see some kind of revolution coming that is going to (they think) dethrone them. So they try to cover each of these areas, and do each one of them, not poorly, but not with enough focus and attention that they win. In the end, no-one at MS seems to care if Zune or anything else fails.

This is what happens when Vista fails... (1)

s1oan (992550) | more than 6 years ago | (#22273484)

Only new users keep live.com as the default search engine in Vista (IE7)... until they discover everyone else is using google because it's a much better search engine. Exeprienced users change it to google as soon as possible or they just remove Vista and install any other OS. In this situation any big corporation will buy another big company in that field and hope it's enough to beat the google juggernaut.

YHOO went up almost 50% yesterday (1)

pclminion (145572) | more than 6 years ago | (#22273496)

If I had owned any YHOO I would have sold late yesterday. At this point they could withdraw the bid, various people have already made craploads of money.

YHOO should find better bedfellows (1)

wsgeek (633907) | more than 6 years ago | (#22273536)

MSFT is only buying YHOO for their marketshare and perhaps more importantly their brand and reputation. Microsoft has a horrible rep; even if Live Search were technologically "better", consumers still have lingering memories of Microsoft's shifty tactics and attempts to force standards on the online community. This, combines with Google's reputation for "doing no evil" are what has kept them out of search. Criminy, people even prefer the Google Desktop Search to Microsoft's own product on their own OS! This is NOT about Google being better technologically; it's about feeling comfortable with Google and not feeling comfortable with Microsoft. It's reputation. If this deal goes through, Microsoft will basically put their own tech underneath the Yahoo domain name (Yahoo IT people, you might want to start looking for new jobs). They are so arrogant about their technology and the "built by Microsoft" mantra. Don't get me wrong; I like competition and I certainly think this deal would keep Google on its toes. But let's see through the veil and realize what's really going on. Microsoft has no friends and they are trying to buy Yahoo's (somewhat) friendly brand as well as their current marketshare.

danger for my data! (0, Flamebait)

treat (84622) | more than 6 years ago | (#22273546)

What about the sensitive data saved in my email? Or the fact that access to my email account gives access to a lot of more sensitive services because they are willing to email me passwords?

Vulnerability to random hackers is one thing (My individual odds of becoming a victim are very small). Microsoft having access to this data is pretty dangerous. They could determine that I use Linux from the email, gain access to online banking, and transfer themselves the money as payment for their unspecified intellectual property. If I am victimized by Microsoft, will I have the same recourse as if it was eastern European hackers?

Microsoft has shown, with the SCOX evilness, that it will do anything to scare people from using Linux - without regards to what is legal. Someone who is willing to do this, and with these kinds of resources, is quite dangerous.

This is a wake-up-call for me. I am going to stop using Yahoo mail, and make sure that all online banking and other sensitive services do not allow elevation of email acccess to the ability to transfer money.

Why prefer Microhoo over Google? (1)

Nomen Publicus (1150725) | more than 6 years ago | (#22273552)

How does this deal improve matters for end users? (I don't say customers as it is obvious that Microsoft now listens to third parties such as RIAA rather than the end users.)

The problem that is being addressed is that the end users prefer Google right now. Why would end users prefer Microhoo over Google?

How does it feel? (0)

Anonymous Coward | more than 6 years ago | (#22273554)

Microsoft has faced competitive threats before, but none with the size, strength, profitability and momentum of Google.
Note to Microsoft: now you know how all other companies on the planet feel about you.

How do you think... (1)

Swampash (1131503) | more than 6 years ago | (#22273654)

...the MS teams who have been slaving on Search, Advertising, and Windows Live feel? Ballmer has just admitted that everything they did was so shit that the only way to fix the situation is to spend nearly 50billion on acquiring another company.

How MS can make millions (1)

lymond01 (314120) | more than 6 years ago | (#22273676)

Put ads on their knowledgebase site.

Why I use Google (1)

whistlingtony (691548) | more than 6 years ago | (#22273696)

Huh...

Buying Yahoo won't help them. Why do I use Google? They have a beautiful clean interface with easy to ignore ads. When I want to look something up I don't want to wait for a million ads and scripts to load. MSN is a nightmare to me. Yahoo isn't far behind. Google has no flashing dancing monkeys or half naked women or seizure causing "You may have won a hojillion dollars!" with half the screen real estate devoted to ads I don't care about and text broken up into pages so they can load new ads all over again.

When I do want to spend my money, I hit up google... It's fast, it's relevant, and the ads don't beat me over the head.

Simple is Beautiful.

-Tony

What about Zimbra? (1)

Teilo (91279) | more than 6 years ago | (#22273700)

I just about choked when I heard the news of this acquisition. We just migrated to the Zimbra Open Source Edition at my company. I adore this product. Now Microsoft will own Zimbra, which is a direct competitor to Exchange. This sucks royally. In the past they have - to a degree - continued to develop competing packages (Fox Pro vs. Access for instance - I know, not a real fair comparison). How will this play into an open source acquisition? My only question is can Zimbra, if necessary, be forked?

Yahoo may not be that profitable (1)

plopez (54068) | more than 6 years ago | (#22273724)

They seem to be losing profitability as well. Probably MS sees a turn around soon, but they may be paying too much. I Yahoo continues to slide MS may be able to pick up Yahoo at a better price.

http://www.thestar.com/Business/article/298769 [thestar.com]

BTW, MS is very much following the GM model. A bunch of investors saw the automobiles as the next big thing and pasted together a mega car company by buying up smaller compaines (Pontiac, Chevy, Buick etc.). Nothing new or innovative here.
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