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Is Microsoft just Screwing with Yahoo's Mind?
Posted by
Zonk
on Sat Feb 16, 2008 01:25 PM
from the inserting-the-nano-probes dept.
from the inserting-the-nano-probes dept.
The Narrative Fallacy writes "This week Cringely offers up a speculative piece asserting that Microsoft might not really care if its bid to buy Yahoo succeeds or not — Bill Gates just wants to disrupt Yahoo and poach the company's employees. 'Microsoft's offer for Yahoo has thrown that company and several others into a tizzy. Yahoo can't be getting much work done, that's for sure ... Redmond's real goal may be simply to poach people from Yahoo, and this deal could help them do just that.' Cringley says there is plenty of precedent for Microsoft's behavior — Microsoft's bids for Borland and for Intuit back in the 1990s sent both companies into a tailspin. 'A failed Microsoft bid, even one involving a termination fee, could lead to horrific results for the company. Remember that Yahoo is staggering here while Intuit was at the top of its market and its game.'"
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Hard to tell what's going on ... (Score:3, Insightful)
Re:Hard to tell what's going on ... (Score:5, Insightful)
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Re:Hard to tell what's going on ... (Score:5, Interesting)
Personally I suspected Microsoft's offer might be fake pretty early on. I mean, it can't be 100% fake, because if Yahoo! were to immediately agree, then Microsoft would have to go through with it, or lose face (and a lot of it). So there is some degree of truth in the offer. But Ballmer might think that the deal has a 95% chance of not succeeding (due to Yahoo! dismissing it, regulatory issues, etc.), and that in that 95% case he manages to screw Yahoo! up big time.
As for why Microsoft would want to screw with Yahoo!, my reasoning as I explained it to someone the other day is this. First, Microsoft would screw with Google if it could, but it can't use this trick there. So Yahoo! is the target, as follows (numbers are made up here, just to make a point): Say Google has 50% market share, Yahoo! has 30% and Microsoft has 10%. If Yahoo is screwed with, it might lose 10% to drop to 20%. In theory 5% might go to Google, 5% to Microsoft, giving us Google 55%, Yahoo! 20%, Microsoft 15%. Note that this helps Google at the same time as it helps Microsoft, but in simple terms, Microsoft has gained 50% market share (10% to 15%). From there Microsoft is at a better vantage point to challenge Google. Or, in other terms: First Microsoft fought with 80% of the market; now it fights with 75% of the market.
Another way to see it is that Microsoft wants to be #2 instead of #3. Any playing fairly always takes more time.
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Re: (Score:3, Interesting)
I am sorry but this "theory" is pretty silly. Why wouldn't it be that Google grabs most of it, at least at the 50:10 ratio?
Re:Hard to tell what's going on ... (Score:5, Insightful)
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Re: (Score:3, Interesting)
No, a 44B offer is absolutely a poker bet. Just because the numbers are big doesn't mean that the rules change. Poker is about psychology, and that doesn't vary with the stakes.
That's more of a universal statement, than something that applies to this topic. When you look at it that way anything/everything/nothing (whatever you prefer) can be looked at as a poker game.
But I seriously doubt that the acquisition offer began with Ballmer and the other top dogs saying "let's screw with yahoo's mind, because we can, and by our machinations we could actually get yahoo to disintegrate and we'll snap up 5% of the online ad revenue market in the process".
In any case, going along with your
On the other hand, the ARE similar. (Score:3, Funny)
Yes, but they are a bit similar: Microsoft has proven, over many years, that it does not know how to run a search engine. Yahoo has proven, over many years, that...
Re: (Score:3, Interesting)
Maybe, maybe not. However I'm sick and tired of the Microsoft conspiracy nutbars who trot out evil reasons for everything Microsoft do.
Ok, perhaps it is true, but if Microsoft were investing so much time and energy being evil in every move they make, don't you think they wouldn't be the #1 company in the field? (profits wise). I'd have thought they'd have slipped a while back.
And no, they haven't slipped. Point out the failure of the Xbox to turn a bu
Re:Hard to tell what's going on ... (Score:5, Interesting)
Go Blizzard! They not only run on Macintosh, they run on Linux with Wine too.
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Re: (Score:3, Interesting)
And you know what? IBM used to be right evil buggers, and it cost them their lead in a big way, too much time spent hurting the competition, not enough time minding the shop. Now everyone loves them, 'ooh, but they love open source' is trotted out in defence against any slight. They were real gits back a few decades ago.
IBM lost control of the market because they over-valued their mainframe business, lost their R&D focus, and fumbled the microcomputer market. Their evil ways? It was all about keeping their dominance with mainframes. Meanwhile the microcomputer sprang from hobbiest device to must-have decentralized business tool. IBM lost control of their attempt to capture this surprise market (one that they had largely ignored) and, ultimately, set the stage for their own downfall; the rise of inexpensive, commod
Treading Water (Score:4, Insightful)
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That is the trouble right there with discussing Microsoft. You really can't have a serious discussion of the company because there a million Microsoft fans who will flip out and point out that a company that Microsoft has/makes 'billions' and that is 'like an infinite amount of money'.
Re: (Score:3, Informative)
otherwise, just to give you a hint "record quarter".
(Sorry, this kind of fud just doesnt work against microsoft. you really have to actually _do_ something if you want to change the status quo)
Re:Treading Water (Score:5, Insightful)
Once upon a time, Microsoft made cool stuff and people bought it... a lot of it. Then, for some reason, marketers took control of the company instead of the creative people and now people are wondering why Microsoft is failing.
It's LEADERSHIP and lack of vision that is dooming this once incredibly influential company. Attempting to poach employees from Yahoo, an equally if not more stagnant company, isn't going to anything but rearrange the deck chairs on their Titanic.
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Re:Treading Water (Score:5, Insightful)
No, once MS, Bought cool stuff from other companies, rebranded it and made deals with OEMs so people would use it. Just about EVERY thing MS has done has been bought by other companies. If it wasn't for getting lucky with DOS (which they bought from someone else) and IBM they would not be existing right now. All MS survived on is luck and buying companies that do innovate. Now that they managed to monopolize all the OS industry, they have just left the community projects like Linux that can't be bought and Apple which would be highly unwilling to be bought. Everything MS has done was by money, even though they have good coders, all MS has done is buy and buy and now they have scared all the competition from even trying, they have nothing left to buy and are now stagnant. Yahoo innovated slightly but I still think it represents the early '90s on the Web whereas Google represents the present age.
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Re:Treading Water (Score:5, Insightful)
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Who on earth would mark you Insightful? (Score:4, Insightful)
Which department decided to bundle Microsoft's desktop apps into what is known as MS Office? Answer = Microsoft's Marketing Dept.
You must be very young to believe Microsoft simply BOUGHT all of their products, or that everything successful is simply the result of their money.(Did I mention MS Office?)
Love them or hate them, but you would be foolish to think Microsoft never built anything on their own towards their success. They didn't buy Excel, they didn't buy Exchange Server, which spawned Active Directory, so give them their due.
Nobody told the folks at Lotus or Netscape that they got beat by money, rather than products that kicked theirs in the teeth. Who did they buy Visual Studio or the .NET Framework from? Something tells me, Microsoft will be just fine for the long term.
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You must be very young to believe Microsoft simply BOUGHT all of their products, or that everything successful is simply the result of their money.(Did I mention MS Office?)
This could be turned around on you, you must be very young to believe MS Office was innovative or the first office suite. All MS did was bundle different apps together. And even then though my memory is rusty I believe WordPerfect bundled an office suite before MS did... Yeap, whereas MS Office [wikipedia.org] was first created in 1989, for the Ma
Luck favors the prepared (Score:3, Insightful)
It amazes me that the geek still fantasies about MS-DOS.
Microsoft was incorporated in 1975 and by 1980 was dominant in languages for the microcomputer. Microsoft was moving up and moving fast.
There would be an MBASIC for the IBM PC and much, much more to come.
Gates promised to deliver a cheap, serviceable, OS in time for the projected launch of the IBM PC, an OS that would sell for
Re:Treading Water (Score:4, Informative)
In 1974, Paul Allen and Bill Gates wrote the first microcomputer Basic interpreter on a PDP-8 minicomputer for an Intel 8080 microprocessor emulator.
MITS licensed MBASIC for the Altair in late 1975, and Micro-Soft was born. By the end of 1976, over ten thousand Altair computers were sold with either the original 4K or a newly expanded 8K MBASIC. Micro-Soft's work on the 8K version was spurred by a new player, Commodore Business Machines, and its Personal Electronic Transactor (PET), which debuted in mid-1976 with a licensed version of what was now called MBASIC 2.0. Early in 1978, Tandy Corporation licensed MBASIC 2.0 for its TRS-80 Model 1 Level II and called it Level II BASIC. At the same time, Tandy cross-licensed Level II BASIC to Apple, so the same MBASIC was running on virtually every microcomputer of any significance. ComputerSource [computersourcemag.com]
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Re:Treading Water (Score:5, Informative)
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Re:Treading Water (Score:4, Insightful)
MS is no longer like a Google-style volatile growth stock. It's more like investing in Johnson and Johnson or something. They need to increase their dividend payouts, if they haven't already.
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Re: (Score:3, Informative)
It's the geek who is out over his head (Score:5, Interesting)
Perhaps you can't forgive the pun. But...
There seems to be nothing that can pull the Geek out of denial.
Microsoft posted breathtaking results in its first and second quarters. 15-20% growth in Windows. In Office. In servers. In home entertainment.
That kind of growth isn't fueled by massive "upgrades" to Win XP.
67 cents of every new retail dollar spent on PC software goes to Microsoft Office.
Microsoft gambled on "the ribbon" and won.
For the quarter, Microsoft sales increased 30 percent in emerging markets, 20 percent in established markets like Europe and 15 percent in the United States. Microsoft has become very well insulated from a recession in the states.
Online services are still posting a loss, but ad revenues are up damn near 40% from fiscal 2007 to $623 million.
There are 427 million Windows Live IDs.
Which suggests that estimates of one billion Windows users world-wide are on the money.
Microsoft has been paying dividends, buying back stock. It holds $20 billion in liquid reserves and doesn't owe a dime to anyone.
Microsoft Q2 2008 By The Numbers [microsoft-watch.com]
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Not really accurate (Score:3, Interesting)
Google is a fiscal service for advertisers with free user services to get viewers to the add content.
MS and Yahoo are user services that use advertising since they already have the users there. The motivation is cleary and entirely different between these companies. Google is all ads, MS wants you on their platform and subscriptions with some ads on the side. Yahoo must have a mountain of email accounts that perhaps MS wants to eat up in order to inte
Since when was business in the USA... (Score:5, Insightful)
Sure, all MS has to do is either make their products better than anyone else's or scare everyone from investing in a competitor's business and products. Either one will result in Microsoft's favor.
Business-wise, since Google isn't going to suddenly lose market-share it is necessary to gain market share, either by purchasing it, or causing your own product to gain market share.
Some very large corporations in North America have been found guilty of this same type of practice. With all the MS bashing on
Whether they actually buy Yahoo or not, MS wins in the business side.
Sure, to the average joe it is hard to see the win, but if Yahoo loses revenues MS will begin to take them (what Google doesn't get anyway). In the business of becoming the largest in your field of endeavor having better products/services than your competition is only marginally more important (if at all) than your competitor being worse than you at the game of business. We all know that MS is very successful at business, not so much so at creating innovative products and services.
Re:Since when was business in the USA... (Score:5, Interesting)
I know a lot of people who use Google as their primary search engine, I know lots of people who use Yahoo for searching and mail, I even know people who prefer to use Ask. Even still there are some who use some hijacked browser page to search. However I have not met one person who really uses Live/MSN to search. I don't think for most people Yahoo is going away soon, most have mail accounts there and of course will use it to check their mail, and unless MS's search engine has new and different features then Yahoo and Google I doubt they will gain marketshare. For most people, they choose search engines from convience not features and Google and Yahoo are rooted in their minds and browser's homepage more then MSN/Live.
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Re: (Score:3, Informative)
Stock price (Score:5, Interesting)
Besides, I thought Balmer was in charge now. What's with all this talk about Bill?
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http://finance.yahoo.com/q/bc?s=YHOO&t=3m/ [yahoo.com]
Yahoo had a sharp spike up at the takeover announcement and Microsoft went down
Yes more rampant speculation! (Score:2)
secondary, not primary goal (Score:5, Interesting)
MS was serious about its announcement about buying yahoo. If yahoo had been openly amenable to the idea, then the deal would be moving forward right now.
The secondary effect (since yahoo was NOT amenable) was to destabilize yahoo, who is a competitor.
So, MS did a cost/benefit actuarial analysis and found that if they bought yahoo for a certain price, then they would benefit. Yahoo doesn't want to sell, but MS still gains b/c of the uncertainty that the bid caused. It was a win/win situation for them. This is how big business works.
Why its not a repeat of Intuit or Borland ... (Score:5, Interesting)
Being at the "top of its market" is a liability - it forces you to look beyond your core business in hopes of continuing to expand. This is what happened to Borland - at one point, Borland owned the programming languagess market, with a 66% market share - more than Microsoft and everyone else combined. Then they went nuts. "Desktop / Professional / Enterprise" versions of compilers were one fo the first signs that rot was setting in. So was the buying and selling of WordPerfect and dBase. The dBase acquisition made sense - it let them compete directly with CA-Clipper. Dumping it later on didn't.
Apple didn't get smart until it had it' near-death experience.
So if Yahoo! isn't at the "top of their game" they can afford to concentrate on what they're doing. Microsoft, on the other hand, has nowhere to go bud down - their #1 competitor is themselves (see Vista vs. XP as a good example).
Re:Why its not a repeat of Intuit or Borland ... (Score:5, Informative)
. This is what happened to Borland - at one point, Borland owned the programming languagess market, with a 66% market share - more than Microsoft and everyone else combined. Then they went nuts. "Desktop / Professional / Enterprise" versions of compilers were one fo the first signs that rot was setting in. So was the buying and selling of WordPerfect and dBase. The dBase acquisition made sense - it let them compete directly with CA-Clipper. Dumping it later on didn't.
Borland's demise began on two very distinct and different fronts. The cause of one of them rests squarely on their shoulders, the second was pure MS evil.
1. Borland deciding to get into the applications market was the most supremely stupid move it ever made. Paradox with its obscure and somewhat strange "Answer Table" model broke down on large data sets and was generally to strange for a lot of people to deal with. Other then that it was a pretty good database. It's main competition at the time were two dBase from Ashton-Tate and DataEase. dBase had a great language but had a pretty low end database engine. Indexes were not dynamic, and if you packed a datafile, you were in re-index hell. DataEase had a built in screen builder, a sreaming fast databse engine, a very SQL like language, a report writer that was pretty damn nice, easy to use and would crank out reports like mad. Unfortunately they bet everything on OS/2 and Presentation Manager because at the time that was where the MS/IBM strategy was heading, then MS pulled the plug and well the rest as they say is history.
Quatro was an insanely wonderful spreadsheet product that was eating both Lotus's and Excel's lunch. It had a native GUI mode, perfect WYSIWYG and was lighting fast. It could handle multiple large spreadsheets, linking, all the fun stuff we enjoy today, and then Jim Manzy, that fuckwad from Lotus Development decided that the only way he could stave off the Quatro juggernaut was to go to court. The infamous look and feel lawsuit that came within a breath of putting Borland out of business. The filed suit in Boston and it looked like Borland was done for, then in the end Borland prevailed, but not until it had spent almost everything defending the suit. To this day I still want to find Jim Manzy in a dark alley and have a chat with him,
2. So anyone remember OWL??? The Object Windows Library? Pretty much up until then if you wanted to write windows programs you had to deal with the bare Windows API. If you had ever used it you knew it was a miserable experience. Many of the calls were very difficult to deal with, at best, and you had to re-invent a lot of things just to make your software work, Borland realized this and did something that changed windows development forever. They took the windows API and wrapped up in a very neat, clean, object based interface. Suddenly writing windows programs became some that was no longer am arcane bith of magic, and pure dumb luck. Microsoft, instead of going WOW, this company is driving TONS of programmers to windows they decided to counter with MFC and of course they really shit the bed. The first versions of MFC were simply awful, bordering on unusable, hell no one at SM would even use them. Meanwhile Borland kept refining OWL, they even had a CUI counterpart called turbo-vision, now called FreeVision as it was open sourced. OWL was being adopted by everyone and their grandmother. Borlands Language products were being used to drive windows development. The integrated IDE, all that stuff you take for granted today was ALL Borland. Up until this time Borland had licensed all the right bits from MS to handle things like integrated debugging, software profiling, really cool stuff within windows and they were flying high. Turbo C, Turbo C++, Turbo Pascal for windows were just climbing the charts. The reviews were rave and Borland was making money hand over fist and developers, for probably the first time ever, had really GREAT integrated tools to create grea
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Re:Why its not a repeat of Intuit or Borland ... (Score:4, Informative)
'That so? Read on please... OWL [wikipedia.org]
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Anders is the Darth Vader of the software industry.
Ever wonder why so much ofAnders is brilliant, he could have created his own software company and did something like .Net that actually was light weight, fast and X-Platform, but instead, .net is .Garbage because it is done the "Microsoft Way".
Google (Score:5, Interesting)
I think not. It's more likely that Google would do so, I expect that their recruiters are quite busy calling Yahoo employees at the moment. If this is Microsoft's goal they've just aimed a double-barreled shotgun at their feet and pulled the trigger. They just gave their no. 1 competitor a huge opportunity. Where would you, as a brilliant Yahoo employee, work next? Google or Microsoft?
Cringley's an idiot (Score:4, Funny)
Re:Cringley's an idiot (Score:5, Funny)
But where's the adventure in that?
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Re:Cringley's an idiot (Score:5, Funny)
But where's the adventure in that?
No homoerotic overtones?
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..it might be ...... (Score:3, Insightful)
Jokes apart, there is a possible explanation which implies no wickedness on the part of MS: MS investments in his search engine + ad seller has been less effective than Yahoo's. MS would never be allowed to bid for Google, so it must settle for second best, which is not a bad place to be if you are much lower in the totem pole.
Given the cash pile burning a hole in MS pocket the cash pile burning a hole in MS pocket [yahoo.com], the pressure to put the money to work somewhere, or return it to shareholders, is enormous, and they cannot or would not invest it in making a better product overall.
That's just about the single stupidest idea... (Score:5, Insightful)
MS did it because they wanted to consolidate a larger advertising and search engine position, and a major internet portal. It was probably still a bad decision, but who can really say what the results would have been ten years down the line?
Look at what MS Stock did. It had broken out of a major rut--a rut not justified by its earnings--for the first time in years following an earnings report last year. Now it's down 24% off its high. Twenty-Four percent. Balmer has lost $3.6 Billion, Gates has lost twice that, and even employees who've only lost twenty or fifty or seventy thousand aren't happy about it--because that is a big chunk of their savings. Now that price change isn't all yahoo, by any stretch of the imagination. But a big chunk of is it from the Yahoo offer.
You don't take that hit for an offer you aren't interested in following through on.
Nonsense (Score:5, Insightful)
If I was a shareholder (I'm not) and it ever came out that MS was doing that with their cash hoard instead of finding market beating investment opportunities, I'd have my lawyer on the phone faster than you could say "class action lawsuit".
My biggest fear (Score:5, Interesting)
Zimbra might not be the greatest software, but it is in my opinion the best open source collaboration/email software out there. It is the only serious competitor to exchange in the open source world. And it will be gone if MS completes this takeover.
Re:Who (Score:5, Funny)
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Re:Who (Score:5, Funny)
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Re:I wish MSFT would screw with me, like that. (Score:4, Insightful)
I'd expect a lot of speculators to actually short the stock.
All in all, for a serious business, it's *not* a good thing to be in this situation. Even in best case it'd rock the boat and cause heart-burns and unrest whether the deal goes through or not.
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Re:Fixes (Score:5, Funny)
You mean Fear, Uncertainty and Doubt aren't Microsofts' 3 main products?
With SCO possibly going private, welcome to FUD 3.11.
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Re:Fixes (Score:5, Insightful)
I am just glad that the Asus EEE has taken off,since it would make buying Xandros more expensive than some of the other Linux Distros out there(I like my Xandros just the way it is,thank you very much).If I had to bet,it would be Novell or one of the older Linux or BSDs.I also think that moves like trying to buy Yahoo shows that they have no direction at the top,which is going to make it that much harder to make a decent OS,as design by committee is never good.
I think the era of a company pounding out an entire OS from scratch is coming to an end. It is just too risky and too costly an operation for even someone like MSFT,and the rise of the low end markets where they simply can't compete(and where they are shooting themselves in the foot by not keeping WinXP) is simply going to make it harder for them as time marches on.You really have to give Steve Jobs credit for seeing the writing on the wall and building OSX out of BSD.It minimizes his costs while giving him a rock solid base to work from.Anyway my .02c on the subject,YMMV.
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