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Microsoft Businesses The Internet Yahoo!

Gates Explains Microsoft's Need for Yahoo 271

Posted by CmdrTaco
from the let-me-explan-my-need-for-a-fresh-cup-of-coffee dept.
eldavojohn writes "Perhaps it's obvious to you and perhaps you'll be pleasantly surprised by his answer but Gates revealed to CNet why Microsoft needs Yahoo. From his response, "We have a strategy for competing in the search space that Google dominates today, that we'll pursue that we had before we made the Yahoo offer, and that we can pursue without that. It involves breakthrough engineering. We think that the combination with Yahoo would accelerate things in a very exciting way, because they do have great engineers, they have done a lot of great work. So, if you combine their work and our work, the speed at which you can innovate and get things done is just dramatically more rapid. So, it's really about the people there that want to join in and create a better search, better portal for a very broad set of customers. That's the vision that's behind saying, hey, wouldn't this be a great combination.""
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Gates Explains Microsoft's Need for Yahoo

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  • by suso (153703) * on Thursday February 21, 2008 @11:17AM (#22502518) Homepage Journal
    You know, if its the great engineers that they want, why not just allocate $40 million or so to hiring them away from Yahoo? Getting access to Yahoo technology isn't really as big of a deal if they are talking about making something new. And great engineers are good at coming up with ideas anyways. If Microsoft couldn't think of doing things a cheaper way, then I doubt they are going to be able to drop the fat enough to fight Google. They are just throwing money at the problem when there are other ways. They could make a think tank like Xerox PARC with all the engineers they could hire for a fraction of the cost. And it would be a safer investment because what's to stop those engineers from just quiting after the buyout? $40 billion could be better spent.

    Microsoft has forgotten that it doesn't take much money to get things done. A guy in a garage Bill, a guy in a garage.
    • by Lilith's Heart-shape (1224784) on Thursday February 21, 2008 @11:20AM (#22502550) Homepage
      Microsoft is pursuing the buyout path because they can. They have a metric shitload of money, so throwing money around is their customary solution to every problem that comes their way.
      • by Silver Sloth (770927) on Thursday February 21, 2008 @11:29AM (#22502750)

        a metric shitload
        Is that the SI shitload? Is it bigger or smaller than the imperial shitload? Can you combine the two shitloads when, for example, landing spacecraft?
      • by peragrin (659227) on Thursday February 21, 2008 @11:30AM (#22502764)
        actually MSFT can't afford to buy yahoo at the current price. they will have to take out some loans, or they will wipe out all of their cash on hand.

        MSFT has less than $20 billion in cash available. With a dropping stock price MSFT will have to borrow money to buy yahoo.

        On top of that MSFT has a history of screwing up acquisitions, and ruining whatever potentional they might of had. Remember yahoo is freeBSD based, MSFT will first attempt to replace all the servers with windows ones. Buy the time a new search engine is ready no one will remember yahoo brand.
        • by haystor (102186) on Thursday February 21, 2008 @11:44AM (#22502990)
          The cool thing about buying something like Yahoo is you can finance against the assets of the acquisition. Typically you might issue stock of your own company reflecting your value of theirs, only risking dilution of your own stock (looking at you Time Warner). Or some combo of that and cash.

          What he's not saying is MS wanted to buy market Yahoo has. Critical mass is the most important thing in the search space. You don't spend $46B for strategic hires.

          • Re: (Score:3, Insightful)

            by eison (56778)
            If critical mass was the most important thing in the search space, Yahoo would have beat Altavista who would have beat Google.

            Quality results are all that matter in the search space.
            • by naoursla (99850) on Thursday February 21, 2008 @12:18PM (#22503464) Homepage Journal
              Selling ads is what matters in the search business.
              Selling niche ads is what made Google money.
              To sell niche ads you have to have lots and lots of niches.
              To have lots and lots of niches you have to have lots and lots of customers and you have to know what niche those customers are in.
              To have lots and lots of customers you need quality results.
              Luckily in search, your customers tell you what niche they are in with their search queries.
              Also, if you someone manage to get lots and lots of customers you can use their search behavior to improve your results.
              The search engine with the largest number of customers improves their search engine the fastest.
              They also happen to make the most money.
              • "To have lots and lots of customers you need quality results."

                Alternatively, you could leverage your monopoly in one space (say, operating systems) to gain market share in another. Not that MS would do that; I'm just brainstorming here.

                I dunno, you could maybe have a lightbox that says "in order to use your Yahoo! Mail, you will have to install Genuine SliverLight Express Addition, which btw requires one of the following Sliverlightable operating systems... "
                • by naoursla (99850)
                  Except that would cause Microsoft to lose market share in the email space. Microsoft is trying to catch up to Google. They don't want to push customers that they purchase with Yahoo away to Google.

                  The only way I could see Microsoft leveraging Windows to win search share is to make it a default on the OS. But the courts have already caught onto that tactic. If you buy a new PC is as likely to have Google as the default search engine as anything else (mostly because Google pays companies that sell systems to
            • Re: (Score:3, Interesting)

              by haystor (102186)
              There was no real quality of search results when that fight took place. It was a different era, with little more than keyword lookups.

              Maybe the MS/Yahoo team could come up with some unforeseen technology that obsoletes Google but nobody knows what that would be. Unless you believe Yahoo has some unreleased, revolutionary technology, I'd have to say the bulk of the price paid for Yahoo would be for their customer base.

              The preceding isn't strictly true. You'd have to value the company based on current oper
              • by Teilo (91279) on Thursday February 21, 2008 @01:56PM (#22504980) Homepage

                There was no real quality of search results when that fight took place. It was a different era, with little more than keyword lookups.
                I totally disagree. When Google first appeared on the scene, they had two things that nobody else did. The first was speed. It was jaw-droppingly fast. Nobody was that fast. Not Yahoo. Not Altavista.

                Second, was a design decision: That search results would contain every word you typed. No more of this +term nonsense. This made things very simple for users who don't care to learn a search-term language.

                The result: happy users.

                After that, they hit hard on designing good algorithms, and hired the mathematical talent to do it. Nobody else treated search with so much science. This made users even more happy. Google had the most relevant results.

                So - Google won because, from the common end user's perspective, they had a superior product. Period. That plays right into the GP's argument. Superior product = more customers = more ad revenue = the first .com services company to be seriously in the black.
        • by pacalis (970205) on Thursday February 21, 2008 @11:56AM (#22503126)
          Microsoft is way underleveraged for a mature company. With debt as cheap as it is, especially given MSFTs debt rating, they should go into debt whether they buy YHOO or pay out additional dividents.
        • Buy the time a new search engine is ready no one will remember yahoo brand.

          At which time "Yahoo!" would be renamed "Yawho?" (or would that be "Yawhom?").

          • by Toonol (1057698)
            At which time "Yahoo!" would be renamed "Yawho?" (or would that be "Yawhom?").

            Depends on whether it's the subject or the object.

            "Yawho is a search engine?
            "He tried to search Yawhom?"
      • Re: (Score:3, Informative)

        by donweel (304991)
        Microsoft does not innovate they acquire, they always have. When IBM approached Bill Gates for an operating system they thought he had, when he only had a basic interpreter, he went out and bought Rdos a CPM clone, and used it to make PCdos. They bought Hot Mail. And here is some more: http://www.microsoft.com/msft/acquisitions/history.mspx [microsoft.com]
    • by rve (4436) on Thursday February 21, 2008 @11:28AM (#22502710)
      You're absolutely right. If I were a MS shareholder, I'd demand that they focus on making money selling the software people use to get to their Google services, not spending 40 billion trying to turn a very successful software company into a probably doomed internet content / advertisement company, directly competing with Google.
      • And YOU are absolutely right. I still don't understand why they think they're in the advertising business. It's not like they don't have some software things to work on.

        Despite what Gates said, the reality is much more likely they need the patents Yahoo! holds, not the people who did the work.

        - spinLock [blogspot.com]
        • Re: (Score:3, Informative)

          by jfbilodeau (931293)
          I think that Bill G. and Steve B. are annoyed that MS's shares haven't moved much since 2000. MS is still a safe investment, but their stocks seems stuck and not growing much.
      • by EmbeddedJanitor (597831) on Thursday February 21, 2008 @03:33PM (#22506424)
        Vista cost $5bn, Yahoo could cost $40+bn. That has to say something about where MS's current management priorities lie. They are Google obsessed.

        If you're competition focussed, and not customer focussed, then don't expect your business to grow. MS has a lot of momentum, so it won't die overnight.

        They've puled the Vista SP1 and that's not getting much of Ballmer's energy. Nope he's off buying Danger and trying for Yahoo to try make a fight with Google.

        Google must be pissing themselves. Both Yahoo and MS are sinking in service space and there is no reason to think that they will be more productive together than as they currently are, while Google is growing.

    • Re: (Score:3, Informative)

      by sw155kn1f3 (600118)
      It is funny though that MS itself started this way and B Gates knows about this, maybe even better than anybody in the industry, yet we've being seen MS to become big bureaucratic enterprise that can't really innovate no more. Their XP success is pretty much logically follows from NT4, and NT4 was still being developed by VMS hacker guys, old-type, so MS windows department just added bells and whistles and created new OS.
      What modern day MS Windows department itself can produce we've seen few times already (
    • by vtscott (1089271) on Thursday February 21, 2008 @11:38AM (#22502876)
      I wonder how many yahoo engineers have non-compete clauses [wikipedia.org] in their contracts. If microsoft started cherry picking a bunch of yahoo engineers it seems very likely that yahoo would take legal action against those engineers. As far as the rest of your comment goes... It's an interesting idea, but microsoft seems to be less concerned about money and more about time. It takes time to develop those great ideas and get a bunch of customers on board. Yahoo already has the product developed and customers using it. This would allow microsoft to catch up now as opposed to 10 years down the road.
      • by hrieke (126185) on Thursday February 21, 2008 @12:05PM (#22503264) Homepage
        Because in California, Non-Competes [typepad.com] have no legal value.

        That said, I agree 100% with the notion that this is MS' Waterloo. They have effectively stated that they can not, even with owning the OS and web browser, use people's web habits and make money from that.

        Perhaps a bunch of Silicon Valley types should buy some MS shares and start a proxy war over where MS is headed (demand that MS pay out their war chest for example)?

        Just a RND thought.

        • by Skreems (598317)
          Well, they're already making money from it. MSN/Live Search do have some revenue. Whether it's enough (whether it's even a positive net revenue) is another question.
    • by Chrisq (894406) on Thursday February 21, 2008 @11:47AM (#22503030)
      Because they want the yahoo groups, mail, etc. Once they make them "silverlight only" they will have effectively locked people into a microsoft web. How many people will change groups because one member says that he cannot access it with Firefox?
      • Re: (Score:3, Informative)

        by rrohbeck (944847)
        >How many people will change groups because one member says that he cannot access it with Firefox?

        Many. Yahoo and Google have been meticulous about platform independence, that's part of what made them successful - as opposed to MSN for example.

        I've been a paying Yahoo customer for many years and I'm ready to cancel as soon as the acquisition goes through.
    • Microsoft Labs has done some really great stuff. But you don't see it in their products. That's why I have a really hard time believing MS can -execute- what Bill Gates proposed.

      If you look at MS's desktop products, in particular, you see a pattern of buying a good product and then as part of integrating it, making it more and more baroque and buggy and security-vulnerable.

      Reminds me of the comment I read somewhere during the MS anti-trust debates: "If Microsoft is so keen on innovation, fine. The decis
    • Yahoo is a trusted name. I have had my yahoo email account since it was Rocketmail. They have Dating, IM, Domain Hosting, Jobs, and a host of other small stuff besides. Their Search engine is NOTHING SPECIAL. Expect it is integrated with the Yahoo site as a whole. It's a question of interconnectivity. Yahoo Maps does a few things better then Google Maps, it meshes nicely with their Yellow Pages site and I use it to find subway stations and bus routes, a choice of closest businesses etc. Microsoft wants to b
    • by samkass (174571) on Thursday February 21, 2008 @12:25PM (#22503572) Homepage Journal
      If these engineers had wanted to work for Microsoft, they probably would have gone and gotten a job with Microsoft. It's not like Microsoft hasn't been hiring aggressively for a decade. My guess is the best and brightest from Yahoo would quickly go work for Google, Apple, or someone else if Yahoo is acquired, and Microsoft will be left with the folks who were unable to escape. Acquiring a culturally incompatible company for the engineers doesn't make sense.

      It seems a lot more likely to me that Microsoft made this offer in order to disrupt the industry for awhile as Yahoo spins in panic mode and Google spends a lot of time contingency planning. I have little belief that Microsoft will actually go through with this acquisition.
      • My guess is the best and brightest from Yahoo would quickly go work for Google, Apple, or someone else if Yahoo is acquired, and Microsoft will be left with the folks who were unable to escape. Acquiring a culturally incompatible company for the engineers doesn't make sense.

        I'm not convinced this is true.

        The public face/reputation of those companies is very different, true. But that being said, I have friends that work at Microsoft, and I've been in some of their offices. I also have friends that work at
    • by Yvanhoe (564877)
      Scenario 1 :
      MS takes Yahoo's engineers.
      MS : "Switch from Yahoo to MSN Live! We have their engineers! our technology is better now !"
      Users : "Yeah, sure..."

      Scenario 2 :
      MS buys Yahoo
      Google : "Er... you know that when you are using Yahoo, you are giving money to MS ? It is evil you know..."
      Users : "Yeah, sure..."
    • Re: (Score:3, Insightful)

      by MightyMartian (840721)
      They want the name. Their own search portal has been a complete and utter failure in every implementation. They need instant market share. This isn't about building a better interface or a better search engine, it's about buying the only meaningful (and even that's a relative term) competitor to Google.
    • They could make a think tank like Xerox PARC with all the engineers they could hire for a fraction of the cost. And it would be a safer investment because what's to stop those engineers from just quiting after the buyout? $40 billion could be better spent.

      That may be true, but one additional advantage of buying Yahoo outright, as opposed to simply poaching their top talent, is that a very large competitor ceases to be a competitor and the market becomes more consolidated between two (2) major players (i.e. Google and Microsoft + Yahoo) which creates substantial barriers to entry to new competitors of the garage startup kind. Buying out the competition to control the market is a time honored tradition in American business with a fairly good track record at l

  • Microsoft's approach to breakthrough engineering is through acquisitions? Is it just me or do I sense an oxymoron here...
    • by morgan_greywolf (835522) on Thursday February 21, 2008 @11:30AM (#22502780) Homepage Journal

      Microsoft's approach to breakthrough engineering is through acquisitions? Is it just me or do I sense an oxymoron here...
      Yes. Just like "innovated" PowerPoint and they "innovated" MS-DOS, etc. Bill Gates thinks "innovate" == "acquire through any means necessary".
    • I'd like to think that the way the company I work for "innovates" is by hiring innovative employees. I'd like to think most companies operate that way.

      In that frame of mind, a mass acquisition is similar to a mass hiring, except you also get existing code, hardware, processes, etc.
    • It's not just you. The absurdities are piling on top of each other, like cockroaches in a cup.

      Gates: "We have a strategy for competing in the search space that Google dominates today, that we'll pursue that we had before we made the Yahoo offer, and that we can pursue without that. It involves breakthrough engineering."

      "... competing in the search space..." That's corporate-speak. Generally, when someone uses corporate-speak, you can expect that they are talking baloney.

      "... breakthrough engineer
  • by brennanw (5761) * on Thursday February 21, 2008 @11:21AM (#22502564) Homepage Journal
    "Look, we innovate. We innovate the hell out of stuff. Just yesterday I innovated a donut by taking one off some old guy when I pushed him down a flight of stairs. And Yahoo!, well, we're innovating them right now, and we're going to keep innovating them until they stop moving. Then we'll use their bloated corpse to innovate any Google employee that gets in our way."
    • Bingo!

      He's been perfectly clear all along, and for 20 years magazine writers have misunderstood him.

      Damn - now we have the right word, the man comes across as focused!

      results for: enervate

      Dictionary.com Unabridged (v 1.1) - Cite This Source - Share This
      enervate
      -verb (used with object)
      1. to deprive of force or strength; destroy the vigor of; weaken.

      --Synonyms 1. enfeeble, debilitate, sap, exhaust.
    • Re: (Score:3, Funny)

      by gambino21 (809810)
      This reminds me of the simpsons episode where Bill Gates "buys out" Homer's internet company.
      From the simpsons archive:

      Bill Gates: Your Internet ad was brought to my attention, but I can't figure out what, if anything, Compuglobalhypermeganet does, so rather than risk competing with you, I've decided simply to buy you out.

      % Homer and Marge quietly discuss this proposal.

      Homer: I reluctantly accept your proposal!
      Bill Gates: Well everyone always does. Buy 'em out, boys! [Gates' lackeys trash the room.]
      Homer: Hey, what the hell's going on!
      Bill Gates: Oh, I didn't get rich by writing a lot of checks! [insane laughter]

  • Translation (Score:5, Interesting)

    by rucs_hack (784150) on Thursday February 21, 2008 @11:21AM (#22502570)
    "Without Yahoo, we are years behind, and likely to stay that way"

    Am I right or am I right?
  • I think Bill has gotten too used to thinking in terms of his own bank account. He should be able to retain some pretty impressive headhunters for a lot less than $20 million per engineer. He might even be able to hold aside some money to keep his $40 billion from leaving to work for Google the next week.
    • Its not only about the engineer. If it were, Microsoft would (and may) go only as far as "due diligence" and get access to Yahoo proprietary information such as the important employee list.

      But I think, Microsoft wants to buy users (Flickr, Delicious, Yahoo Mail, etc.). Google is making Microsoft less relevant, and there is some sort of network effect that makes smaller players nearly impossible to catch up. Anyone can duplicate an Ebay, but you can't duplicate the user base. The success of the service
  • by Rik Sweeney (471717) on Thursday February 21, 2008 @11:23AM (#22502608) Homepage
    from the Cmdr-Taco-needs-a-grammar-checker dept.
  • Yahoo is acquired by Google, then Yoogle turns around and acquires Microsoft. Classic Pac Man defense [wikipedia.org].
  • by sm62704 (957197) on Thursday February 21, 2008 @11:23AM (#22502624) Journal
    And here I thought it was because Yahoo's pages are as fugly and user-hostile as Microsoft's. Shows how dumb I am.
  • I seem to recall that he stated he was retiring. And back in 2000, didn't he quit then, as well?
  • by h4rr4r (612664) on Thursday February 21, 2008 @11:25AM (#22502658)
    So, if you combine their work and our work, the speed at which you can innovate and get things done is just dramatically more rapid.

    This is the school of thought that thinks if you get nine women pregnant you will have a baby in one month.
    • Um, no, it's from the school of thought that says two people working together can get a job done faster than one person.
      • Re: (Score:2, Insightful)

        by h4rr4r (612664)
        That is highly dependent on the job being able to be split into multiple activities. Writing this post for instance is not very well split into a job for multiple people. Design is often not well split into multiple tasks, too many cooks spoil the soup.
      • by Abcd1234 (188840)
        I have three words for you: Mythical Man Month.

        And that's ignoring the hell of trying to merge two corporations, with two different corporate cultures, into a single whole. Worse, they don't just want to take Yahoo onto the side of MSFT... that wouldn't be so bad (just look at how AOL handled Nullsoft... at least, in the beginning). No, what they want to do is assimilate the technology Yahoo has and combine it with their own. And *that* is exceedingly hard, both technologically, and from a cultural/soci
    • Yea but.. (Score:2, Insightful)

      If you start having sex with 9 women right now the chances of you being a father in 9 months is much greater than if you only had sex with one.
    • I always thought throwing more resources at a software problem was as likely to slow things down as speed things up. That's what they taught me in CS207. That's what my personal experience has been. That's what dozens of software development methodologies advocate. But then again, this is Bill Gates, expert programmer, talking. Maybe I've been wrong all of these years.
  • by utnapistim (931738) <dan.barbusNO@SPAMgmail.com> on Thursday February 21, 2008 @11:27AM (#22502688) Homepage

    So, if you combine their work and our work, the speed at which you can innovate and get things done is just dramatically more rapid. So, it's really about the people there that want to join in and create a better search, better portal for a very broad set of customers.
    While I'm sure the people and the innovation speed and all that sound nice, if he'd have said "We want yahoo for the marketshare" it would have been more credible.
  • by uss (1151577) on Thursday February 21, 2008 @11:28AM (#22502726)
    Dear Bill Gates,

    First, Take a look at http://www.eep.com/merchant/newsite/samples/ee/ee0801.htm [eep.com], for "Why Most Mergers Fail".

    Next, take a look at press releases involving mergers in financial and industrial companies.
    Note, how there is highest emphasis on cost savings, and very little mention of ideals and NEW business strategy after the merger.

    Lastly, the kind of "merger" you are suggesting is typically done as a buyout of a small company by a much larger company.

    See! This is what happens if you drop out of Business School.

    For just a 0.1% Fee based on the deal value, I can help provide further advice.

    Good Luck!

  • and if the best & brightest leave to work somewhere else at the moment of acquisition thus benefiting neither yahoo or microsoft, leaving yahoo looking like a building with a few servers & developers workstations and a few secretaries & janitor with a mop & bucket...
  • Boil it down (Score:5, Interesting)

    by Wannabe Code Monkey (638617) on Thursday February 21, 2008 @11:31AM (#22502794)

    better portal for a very broad set of customers

    You can boil his entire quote down to the above 7 words. Microsoft likes nothing more than to get their name/software/web properties in front of everyone's face. Adding Yahoo and all Yahoo's users to their portfolio is what they want. Imagine if all of a sudden everyone with a @yahoo.com email address automatically had a Passport account... all of a sudden Yahoo messenger is 100% compatible with MSN messenger.

    • Re: (Score:3, Interesting)

      by ubannoying (1180225)
      The problem with this plan is that many of these "customers" use the yahoo portal because they find to be the better portal as it currently is. If Microsoft takes over Yahoo, what are the odds that they'll leave the portal alone? Slim to none, I'd say. If they "innovate" it into the MSN portal, I think they'll lose a lot of customers, and find that they didn't really gain a lot in the acquisition.
    • by naoursla (99850)
      Nah... Microsoft would probably not switch all yahoo email addresses to hotmail. That would destroy a valuable brand. It is more likely that yahoo email accounts would being displaying ads sold by Microsoft.
  • by Alzheimers (467217) on Thursday February 21, 2008 @11:33AM (#22502812)
    This merger comes from the great minds who brought us Reese's Chocolate and Garlic Butter Cups.
    • Re: (Score:3, Funny)

      by Stanistani (808333)
      It was an inspiring accident! A Microsoft CIO bumped into a Yahoo! CTO in the hallway...

      "Hey! I got some of my 'sucks' on your 'blows'!"
      "I got some of my 'blows' on your 'sucks'!"
      "You know, combining 'sucks' and 'blows' is a great taste!"
  • by esocid (946821)
    Speech, speech, speech (obligatory Arrested development quote). Ok down to business.

    The version after Vista is a big step forward in terms of speech. It's a big step forward in terms of ink. It's a big step forward in terms of touch. I'd say that the likelihood is that touch will become mainstream on certain form factors very quickly, because we're working hand-in-hand with the hardware companies.

    What is with M$ and their big interest in speech recognition these days? I keep seeing commercials with cars and

    • by cching (179312)
      I think speech enabled gadgets are great and possibly life saving. Any time I'm almost run off the road by some idiot who insists on trying to hold their little mini-phone up to their ear by wedging it in between his shoulder and ear I think how essential speech enabling these devices really is.
    • by sm62704 (957197)
      Well, in cars speech makes great sense. I don't want to take more than one hand off the wheel, and I don't want to take my eyes off the road. That's why I like my stereo controls and cruise controls that reside on the steering wheel, and wish the heater controls didn't force me to look away from the road as well. Saying "KSHE" and having your stereo tune itself to 94.7 is, to me, far preferable than hitting that control on the wheel several times, or finding the button on the stereo.

      And when at home I'd lik
  • Problem is... (Score:5, Insightful)

    by JamesP (688957) on Thursday February 21, 2008 @11:34AM (#22502830)
    Take great engineers, put them in a crappy company and they'll not be that bright.

    Most of the problems (of people sucking) are inside the companies: philosophy work environment, colleagues, etc.

  • No Zimbra??? (Score:5, Interesting)

    by jkrise (535370) on Thursday February 21, 2008 @11:40AM (#22502916) Journal
    Just an hour ago, I spoke to a Zimbra partner, and he informs me that in case MS does get to buy Yahoo, Zimbra would be out of it, to allay antitrust fears. That would mean Zimbra will have to be sold back by Yahoo and bought over by some other company. Is this true? Or is the popularity of Zimbra the reason why Microsoft would buy Yahoo to kill it off?
  • I recognise an ongoing bullshit senario when I see one, and this is one!
  • "Yahoo! is our search strategy now. We've spent years trying to find a paper clip with a junkyard crane magnet, and we've failed."

  • Translation (Score:5, Insightful)

    by Bob9113 (14996) on Thursday February 21, 2008 @11:46AM (#22503020) Homepage
    We have a strategy for competing in the search space that Google dominates today,

    "Ballmer has his panties in a bunch. He said we're going to fucking kill Google, and he gets a little attached sometimes, you know? So now we've got to figure a way to f'ing kill Google."

    that we'll pursue that we had before we made the Yahoo offer,

    "In case you think we're upset about Yahoo's rejection, we're not. Ballmer's still stuck on the '<expletive> kill Google' thing (do I have to keep saying it?) - he can't even see Yahoo past the bulging vein in his forehead."

    <from offstage> "Yes you have got to goddammed keep saying it!" <sound of chair crashing into wall>

    and that we can pursue without that.

    "OK, we admit he's a little obsessed. But don't think this will divert an painful amount of capital into an a space in which we have utterly failed for years. Because, ummm, we don't want you to think that."

    It involves breakthrough engineering.

    "All we need is some of that breakthrough engineering stuff. We hear that stuff is all the rage with the kids these days, and we figure if we can get some of it, we'll be all set to *** kill Google."

    We think that the combination with Yahoo would accelerate things in a very exciting way,

    "We looked around for startups to partner with, so we could copy their technology then dump them, but apparently everyone has heard the compendium of stories that start with Stac. We figure it'll be easier to buy Yahoo. (we figure it would be easier to host a snowman making competition in hell, incidentally) Just have to figure a way past that little, 'Yahoo flipping hates us' thing."
  • So, if you combine their work and our work, the speed at which you can innovate and get things done is just dramatically more rapid.

    Wouldn't that require Microsoft to innovate? With all the problems of Microsoft combining the two very different cultures, asking Microsoft to innovate at the same time (and some may say, for the first time) may be too much for Microsoft to handle.

    • Re: (Score:3, Insightful)

      by Skreems (598317)

      Wouldn't that require Microsoft to innovate?

      I don't think raw innovation is the problem. Like so many places, it's likely that good ideas are all over the place, even implementations of good ideas, but management and marketing ignore them because they don't fit their pet projects, or don't double market share in a week. Google's advantage seems to be that their management actually understands the benefits of investing heavily in good engineering from the ground up. Engineers everywhere want to do things ri

  • by mlwmohawk (801821) on Thursday February 21, 2008 @12:06PM (#22503288)
    It is not very well known, but I remember talking to an engineer at Yahoo, and I asked, "How do you make money?" He said, this was a couple years ago, that 60% of all e-commerce sites were hosted by yahoo. Think about that, credit cards, transactions, data, users, etc. M$ would live to control that.

    Think of all the anti-competitive stuff they could do. Subtle problems with non-windows platforms or non IE browsers. A requirement of Microsoft Wallet. (Remember that?)

    There are a ton of reasons why Yahoo owned by microsoft would be a bad thing for the world. I hope Yahoo remains independent.
  • by Jon Noring (715238) on Thursday February 21, 2008 @12:18PM (#22503460)
    Bill Gates comment is interesting in that MS' purpose in acquiring Yahoo is primarily for Yahoo's technical people, and not for any particular technologies/IP held by Yahoo. That is, MS values Yahoo only for its technical people. In a sense MS is fighting a war against Google on two fronts: 1) the search engine business, and 2) attracting the sharpest technical people. MS is losing on both fronts. Instead of MS changing its corporate environment so as to again be attractive in recruiting sharp people, MS is simply trying to buy these people from other companies. It's sad really, and reflects the real problem with MS: its employee environment. Who wants to work for MS these days? (Just read Mini-Microsoft's blog for interesting insights into how MS has evolved -- it is a pretty brutal work environment that no longer sufficiently rewards those who excel.) It'd get real interesting if a significant number of Yahoo staff come out and publicly say they will move to other companies (e.g. Google) should MS buy out Yahoo. In fact, Google could get the word out essentially rolling out the red carpet for any Yahoo employee who decides to leave Yahoo should the MS takeover come to pass. Imagine if 1000 of the top Yahoo staff said "we will not work for MS." I can't think of a better "poison pill."
  • by 0WaitState (231806) on Thursday February 21, 2008 @12:21PM (#22503516)
    Microsoft is unlikely to be so interested in Yahoo for the search capability, though that's a nice side benefit. The real prizes are yahoo webmail and yahoo messenger. Combine those two with hotmail and MSN messenger and you have about 75% of all webmail traffic and about 2/3s of all IM traffic.

    Fussing about the combined entity's search percentage is just noise--the real new killer market shares would be in webmail and IM.
  • by Animats (122034) on Thursday February 21, 2008 @12:24PM (#22503552) Homepage

    I'm not sure that search technology matters all that much. For the first half of 2007, Yahoo search was probably better than Google search. Yahoo had all those special cases (weather, celebrities, stocks, etc.) working before Google did. Yet Yahoo's market share barely moved.

    What matters for profitability is the effectiveness of the advertising-delivery system. In that, Google is way ahead of Yahoo, MSN, and the little guys (Ask, Mahalo, Wikia, etc.) Yahoo top management knew this in 2006 but couldn't catch up.

    If Microsoft has some great idea, it's probably on the ad side, not the search side. They control a browser, so they can put in something intrusive if they want.

  • by byronne (47527)
    "So, if you combine their work and our work, the speed at which you can innovate and get things done is just dramatically more rapid."
    I'm really, really surprised to hear Gates say something like this. It's been my experience that the more resources you throw at a project, the less efficient and the more bogged down it becomes. I would have expected Gates to have found this to be empirically untrue, especially given the vast number of bloated & overdue projects Microsoft has had to deal with in the pa
  • Would we then get AT&T Microsoft DSL? That would only run on Windows with IE?
  • by SpinyNorman (33776) on Thursday February 21, 2008 @12:53PM (#22503980)
    I'm sure Microsoft is more interested in buying the customer/client base, both for Yahoo!'s web properties as well as advertising services, as well as eliminating a competitor in these areas so they can concentrate the fight on Google.

    There may be some search expertise in Yahoo they can use, but really I doubt Microsoft is lacking in software talent, and I'm sure Microsoft research is more than up to the task of providing any necessary technology. The reason Microsoft is falling behind Google is surely because they are not so nimble (although I wonder how long Google can keep it up, if indeed they still are, given their crazy growth rate). Microsoft have become a giant slow moving behemoth, and apparently have horrible software management practices. The years of delay and scaled back feature set of Vista says it all. Adding masses more Yahoo! software engineers and managers to the mix is not the solution. Microsoft need to totally rethink the way they manage software projects - cut the burocracy and layers of management and inter-team back biting and get back to start-up type get-it-done environment.

    IMO, the spin that this is about aquiring great technology is presumably because that sounds better than saying they're trying to remove a competitor and remove user choice - FORCINC people to become Microsoft customers.

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