Microsoft Offers $44.6B for Yahoo

Just set up a google.mail account! 10 years with Yahoo. Oh well.

I am not surprised by this at all. If this goes through, it will cement Microsoft's future and make them the entrenched No.2, we all know who will be No.1..

This is a business model that has served Microsoft well over the years. The great freedom and power of the Information Age is also it's greatest threat: who owns your data? Or in this case: who controls access to it? I suspect that ultimately these are effectively the same question.

Mind you, these questions should be asked about any company, product, organization, government, or software license. But Microsoft has a long history of abuse that indicates something like this wouldn't end well for end users.

The other side to this is that as Microsoft continues to squeeze the industry for more control and/or profit, more users are beginning to wake up to the fact that MS isn't the only option out there. They'd have to do something tremendously stupid, but the potential is there for an MS Yahoo deal to backfire and result in damage to "the beast".

Honestly, if MS would learn to play nice with the other children, and operate by some reasonable code of business ethics, deals like this wouldn't bother me at all. Here's to wishful thinking. . .

Quoting:The Justice Department says it is interested in reviewing antitrust issues associated with it.

I should hope so, especially in light of this:

Quoting:Reading the court's summary of how things happened, it's a story of Microsoft time after time telling the court that it needed to try a new system to try to comply, after studying why the previous one didn't work. And the court would go along. In short, Microsoft, from my reading, tried to look like it was in compliance, while in fact not complying, hoping the clock would run out.

http://www.groklaw.net/article.php?story=20080130154057257

Quoting:In conference call Friday morning, Microsoft Chief Executive Steve Ballmer indicated he won't take no for an answer after Yahoo rebuffed takeover overtures a year ago.

[TOS violation pre-deleted]

Same pillage and rapine, different day.

Quoting:Call me a cynic, but I can't see the DoJ getting in the way of this one.

Right, there is Google. Google Search, Google Mail, Google Groups....

Quoting:Just set up a google.mail account! 10 years with Yahoo. Oh well.

Quoting:I am not surprised by this at all. If this goes through, it will cement Microsoft's future and make them the entrenched No.2, we all know who will be No.1.

Remember the MS motto: Embrace, Extend, Extinguish ! Microsoft will skim Yahoo! for all it can get and then either skeletonize it or downright bury it, before taking on Google more confrontationally, head-on.

My feeling is that this will help neither MS nor Yahoo, and is end of the road for Yahoo. What they are missing, and Google gets, is the issue of trust. When choosing an information broker (which is what a search engine basically is, like a newspaper or media outlet) you want to believe that they are 'on the level' with you, and that they'll play fair with you as a customer at least as a matter of policy. Microsoft's ethically challenged corporate culture makes that pretty much unthinkable.

Google understands the issue and they have been trying to differentiate themselves on it -- not always living up to it though. But at least they see the issue for what it is.

The one thing that is of interest to me is that Yahoo is a major user of free software.

What will happen to them now?

Oligarchy. Woohoo. :-(

>> Remember the MS motto: Embrace, Extend, Extinguish !

Takes second place to their primary motto: If you can't beat 'em, buy 'em.

> Yahoo is a major user of free software.

If the deal goes through, I believe the correct tense will be was, not is.

> The one thing that is of interest to me is that Yahoo is a major user of free software.

> What will happen to them now?

It will be like HotMail after Microsoft bought them. They will be forced to switch over to all MS software and all code written for other platforms than Windows will be ported or rewritten. Yahoo's web sites will be redone so that intentionally or not, they will work less favorably with non IE browsers and support for other platforms such as Mac or Linux for things like Yahoo Messenger will languish if not outright be discontinued. At some point I wouldn't be surprised to see things like Yahoo mail phased out in favor of Microsoft's HotMail platform and Yahoo IM replaced with MS Messenger.

Most people probably think this is only about web advertising revenue and search engine market share, but you have to figure that Microsoft's goals also include alienating non-Windows users and also to take out a company that has been an example of commercial success with open source software.

A large difference between what Microsoft is doing and what Google has done (for the most part) is that Google built their businesses, while Microsoft bought them.

For example, Gmail verses Hotmail.

Janitor is exactly right, I believe. Just as Hotmail became just another attribute of Microsoft proprietary lock-in, so will both Yahoomail and YIM. And not because of some terrible nefarious plot or design, but simply because that is exactly what Microsoft always does and always has done.

Did you see the "graphical" representation of Microsoft's view of OpenSource software? http://blogs.zdnet.com/microsoft/?p=1142

Very obvious: All Microsoft formats, all Microsoft platform, all Microsoft back-ends, Microsoft development environment. F/OSS is just there for random tools (until such time as Microsoft writes a replacement).

Yahoo (or MS-Yahoo) will be used, after it no longer quite works with non-IE browsers, as an example why using Windows means greater _compatibility_.

That's the key, I think. Microsoft realizes that they must do everthing to try to disguise that MS products are the only ones that are "incompatible" with absolutely everyone else.

Like saying, "America is perfectly compatible, it's everyone else that won't use the English measurement system."

Every time Microsoft talks about "interoperability" they are _LYING_. All F/OSS formats are well documented and wide open. If Microsoft had any intention of being interoperable, they could do so 100% in no time.

If you can't buy them, enjoin them.

Quoting:If you can't buy them, enjoin them.

Good one Colonel, but I still think it is more like "If you can't beat them, join them".

They tried hard and so far, all ended in failure. May be they are trying to join in.

Knowing their history though, I would agree with Bob,

Quoting:F/OSS is just there for random tools (until such time as Microsoft writes a replacement).

On the other hand, didn't they already write .Net to be the replacement? May be wasn't good enough!

You guys can be purists all you want, but I hereby offer dinotrac.com for sale to Microsoft. I can be bought. I can be bought for a tenth of what they're paying for Yahoo. Heck, a hundredth.

Quoting:t some point I wouldn't be surprised to see things like Yahoo mail phased out in favor of Microsoft's HotMail platform and Yahoo IM replaced with MS Messenger.

As an LXer reader I can't blame you for omitting something: Hotmail and MSN Messenger have been phased out already. Everything is called 'Windows Live Bla' now. Not that it's important. I mean, not to us. But to Microsoft, this whole Windows Live thing seems utterly important. In a world where especially one of their two cashcows gives less and less milk (MS Office, that would be) and where judges seem 'hostile' to MS (from an MS point of view), proliferation of business to other branches is important.

Now here comes what I think: Microsoft _recently_ phased out the name Hotmail, only one year ago or so I believe. But it kept the name Hotmail from 1998 - when Microsoft bought it - till at least nov. 2006, when Microsoft started to roll-out Windows Live, starting wiht a pilot in my country. This means they kept the name for 8 years. I guess they will do about the same with Yahoo!.

> Yahoo's web sites will be redone so > that intentionally or not, they will work less favorably with non IE > browsers and support for other platforms such as Mac or Linux for things > like Yahoo Messenger will languish if not outright be discontinued.

Quite possibly they'll try, but the thing here is that this only works for locked-in customers. That doesn't exactly describe most Linux (or Mac?) users. Or Google-style online services. Today, there is competition in this market!

Indeed, it seems today they will lose about 1 out of 7 of their 'Yahoo' customers if it doesn't work in Firefox anymore. If we look at the acquisition of Yahoo as a mere acquisition of Yahoo's customers, that would mean flushing 1/7 of $44,6 billion = $6 billion down the toilet, hoping to create more value in Microsoft by decreasing the value of Yahoo. If Microsofts shareholders weren't that incompetent (Bill Gates comes to mind) I'd say they were not going to take that.

Quoting:If MS wins the bidding (and I think they will, because they need it more than anybody else), I predict an unholy mess for a good long while, along the lines of the Time Warner AOL mishegas -- only with even bigger egos to manage.

Yahoo employees will leave in droves, and Google will happily snatch up the good ones. Redmond will slough off the redundancies between it and Yahoo, and it will mostly make the wrong choices -- choosing to keep the stuff it's developed in house (like Hotmail) instead of the superior products (Yahoo Mail). The revenue bump from online ads will be nice, but merging the two brands will be like a python trying to digest the engine block of an Oldsmobile Cutlass Supreme.

http://weblog.infoworld.com/robertxcringely/archives/2008/02...

Woohooo! Man, what a show!!

Am sorry. Like Yahoo. Cringe at Ya-Vista.

No No No..not Ya-Vista..

Microsoft + Yahoo = MY

Get it?

MY Computer..

MY Internet..

MY..

Malaysia?

Probably the only thing they're interested in is Yahoo! Finance. This looks pretty suspect to me:

http://finance.yahoo.com/q/ao?s=MSFT

What informed person would give the advise: Buy Microsoft shares?

This seems to be a big admission that MSN is a competitive flop. The same 44.6 billion that Microsoft is paying for Yahoo could have been spent improving MSN. But, of course, after all that it would still just be MSN and not Yahoo.

But Sam,

Why work hard and make what you have better, when you can imitate,steal or just take what someone else has that is better?

;-)

Quoting:...when you can imitate,steal or just take what someone else has that is better?

That wouldn't be enough to gain the wide user base Yahoo already has.

I never was a Yahoo customer or user, ever.

Abe, I was saying that in reference to what Microsoft does to the other players in the market

MYlanta

Aaaand the gold medal goes to azerthoth!

Quoting:Microsoft + Yahoo = MY

OK, I see, MY. But who/where is the frame of reference? Am I looking from my own point of reference, like in the way 'My Computer' really means "hkwint's computer" as with WinXP? Or when saying 'MY', is the frame of reference in Redmond and Sunnyvale? I'd say the latter.

Quoting:Or when saying 'MY', is the frame of reference in Redmond and Sunnyvale?

"MY" means "Microsoft-Yahoo", so of course this one.

Fortunately, they're a bit too late for MY SQL ;)

MY as is what's theirs is theirs, and what's ours is theirs.

...from my cold, dead fingers.

Quoting:MYlanta

I thought Mylanta was supposed to *help* indigestion - not induce it.

Most of the arguments for and against the MS acquisition of Yahoo focus around brand recognition, increased customer base for marketing, being one of the leading search engines to vie with Google, ...etc.

Consider this: Microsoft's purchase of Yahoo would include with this purchase of course, all IP patents Yahoo has invented. These all would now belong to Microsoft to use or to abuse as it wishes. What about a possible future (or more immediate) Microsoft attempt to bludgeon Google and other possible F/OSS-using vendors with FUD and IP Patent legal threats regarding its new IP holdings, unless such F/OSS companies are forced to somehow ante up ?? The clear threat would be that such F/OSS-using companies are now illegally using the old-Yahoo's IP in IN ANY DEGREE within their products and/or services. Maybe anteing up by making certain undisclosed Novell-type "deals" with Microsoft?

Just exactly how far-fetched is this scenario?

Quoting:Just exactly how far-fetched is this scenario?

Its not far fetched at all...

Google has a rather big 'patent portfolio' to use as a defense though. And, sad for Microsoft, Google doesn't make its sources like pagerank public or open source, so it will be hard for Mircosoft to state which IP Google infringes.

Looking at the USPTO database, it seems Yahoo! only has 96 patents. For a reference, Google has 75 of them. That's really peanuts compared to the 8000+ patents Microsoft owns, but who knows? It seems both Google and Yahoo! depend on trade secrets and not patents, just like Coca Cola and Windows. As far as I know, not much of PageRank is patented, because if it was, it would become public and the whole world would know how it works and how to abuse it. The same must be true for Yahoo.

So, how far fetched is it? If Microsoft thinks those 96 patents are enough to scare Google, and Google won't try to use their 75 patents to 'counter-sue', than it's not far fetched. But if Microsoft really wanted to take this path, why didn't they sue Google for using Linux - which infringes on Microsofts IP as they say - in first place? They could also file a whole new patent farm using Yahoo's current trade secrets, thereby making those trade secrets public, at the disadvantage of allowing people to abuse Yahoo's pagerank system. It sounds like a possibility to me.

However, these 96 patents doesn't look like a healthy source of FUD to me, Yahoo needs its trade secrets, and therefore I'd say at this moment it's a bit far fetched.

Quoting:As far as I know, not much of PageRank is patented, because if it was, it would become public

Ah, the beauty of it! They patented the concept and the recipe is there for someone to make something PageRank-like (and get sued for it), but the details are secret. Very well, my friend! Anyway, algorithms of any sort have a interesting property that usually they have lots of parameters. The concept may be fully revealed, but if you don't know the exact values for the parameters (in a concrete implementation of interest), this knowledge not of much use. That's how modern cryptography works, for example.

Quoting:Google has a rather big 'patent portfolio' to use as a defense though. And, sad for Microsoft, Google doesn't make its sources like pagerank public or open source, so it will be hard for Mircosoft to state which IP Google infringes.

It won't stop them from trying. Exhibit #1: SCO.

You're right, turns out Yahoo! is four years older than Google, so why not state Google was built upon Yahoo's IP? When it comes to search engines, it seems Microsoft ain't got much to lose.

I was looking at the money in an article in the local paper about this merger idea.

Microsoft said it would gain them some $1B in income each year by buying Yahoo.

...but that's $1B/year, for a $44.2B investment.

That's a return of less than 2.5%.

So we all can rest assured that Microsoft is in no way doing this for the money. With Microsoft's cash reserves, they could give up writing software entirely, sell their campuses, invest all the money in mutual funds, hedge funds and the like, and pay all their employees for the rest of their lives, and maybe make even more money than they already do.

Quoting:That's a return of less than 2.5%.

$1B/year times 44 years wuold still equal an 'exact' return of investment. So I wonder how many years you should take when "calculating" ROI.

> That's a return of less than 2.5%.

By comparison, a 30 year treasury bond is currently returning 4.32%.

For those interested, you can get the current rates here: http://www.ustreas.gov/offices/domestic-finance/debt-managem...

> I wonder how many years you should take when "calculating" ROI.

A good business to buy into will have an ROI of 8 years, a not so great 10 years.

44 year payback is _abominable_ in terms of a business investment. The "treasury bond" investment doesn't pay great, but there is no risk.