Letters to the Editor
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in a normal regulatory environment, this merger would have antitrust implications
I'm guessing Microsoft is eager to seal this deal before President Obama fires all the foxes guarding all the hen houses.
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Another big buy boondoggle
Andrew's take seems spot on to me. I would just add that history suggests that mergers are almost always bad idea. They're almost always bad for everyone except the CEOs involved, who walk away with big money in their pockets. Everyone else, customers, employees, and shareholders, get screwed.
Apart from the fact that they distract top management from what ought to be its primary focus--namely, managing the company--they also demoralize employees (with the inevitable "redundant" workforce cuts and general exodus) and entail huge expenditures for operations integration. This deal in particular will have to bridge a gigantic brand gap. I, for one, will probably leave most Yahoo! services behind if it goes through. And then there's the even bigger problem of Yahoo's and Microsoft's vastly different corporate cultures. If the merger happens, I predict that most of Yahoo's brains will drain away to Google or other internet companies. Very few people who enjoy working for a company called "yahoo!" will relish the prospect of being microserfs, no matter how good the salary.
Shares of Yahoo! closed yesterday at $19.18. Microsoft's offer values each those crazy Yahoo shares at $33.28. (Right now, Yahoo! is trading at $27.78, up more than 44%.) Since you should only buy good stocks at bargain prices, it would seem that Microsoft Chief Executive Steve Ballmer's team has some sort of insight which everyone else lacks. Great to see Microsoft on the run--there's no where to go but down. I predict that Microsoft will be around, but largely irrelevant, ten years from now. You heard it here first.
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Google is the Monopoly
I've no great love for Microsoft, and agree with Andrew this is an act of desperation. However, I would hardly oppose this deal on regulatory grounds. Google is the real monopoly at this point, and I have great respect for many of their tenants. No matter how good a dictator is, a dictator is still a dictator. I'll applaud Microsoft and Yahoo if the merger works and we have some real competition in the world of search and advertising.
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Well, maybe
Google will be well on its way to conquering the next frontier.
Unless it falls to the next up-and-comer. If it can happen to Microsoft, it can happen to Google.
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Hard to see
A faltering software company with 60 billion or more in cash, goes after the faltering #2 online company in the midst of internal turmoil. And they pay 60% premium over market to do it. Hard to see how this can work.
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it won't work
The real prize for Microsoft would be the Yahoo employees. But as soon as they get wind of being owned by evil empire Microflaccid they're gonna leave.
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You can't get more button-down, corporate and boring than the word "Microsoft."
The above words were clearly written by someone without a sense of industry perspective. Um, how about IBM?
Yes, the industry has changed since the days when Microsoft had programmers who worked in their offices coding in the nude, and maybe IBM is as edgy as Microsoft in some ways, what with their Linux adoption and whatnot. But I think the premise of this article is flawed. Ever been on the Yahoo campus? Then what is the basis behind these judgments?
Just because it has a silly early '90s dot-com name doesn't mean the culture is so different.
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Overture is dead! Long live Overture!
Anybody using sponsored search for the past few years will remember Overture, the one time sponsored search competitor to Google AdWords. Overture ran ads on both the MSN and Yahoo search/content networks. While the end user experience was just about the same for both networks - a user sees text ads on the right hand side of the screen when they type in a keyword - the advertiser side of the system was vastly more clumsy and cumbersome than the one provided by AdWords. For one reason or another MSN took its ball and left to go make the MSN AdCenter and Yahoo rebranded Overture as Yahoo Search Marketing.
The great hope was that independently MSN and Yahoo would come up with a better system than what Google had, which was - and is - quite user friendly. But somehow, both MSN and Yahoo found a way to make their user experiences worse.
The reason Google beat Yahoo in the first place was because they offered a search bar and Yahoo offered everything under the sun in the search for "stickiness". They preferred the portal method that was so hot in the late 90s. MSN followed suit with Yahoo and went the portal route. Those sites have spent a great deal of time refining their experience but they can't seem to compete with Google's simple search philosophy.
To date, Google has done a better job serving the end user in the realm of search. MSN has released some neat toys on live.com for search but nothing meaningful. The best thing about Yahoo is their SiteExplorer feature. And Google... well, Google just seems to keep working.
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nkennedy
Actually Oracle, SAP and CA are way more buttoned down than IBM. In the services arena, Perot, CDC, Lockheed, Accenture are way more anal than IBM.
To their credit, neither MS nor Yahoo are all that good at efficient low cost high reliability online hosting. So together I wouldn't be shocked if they went to a service provider to host everything for them. Google - no one but Google can host Google. But Yahoo is a more traditionally organized data centers operation.
Buuuut - and here's the key point. Fads are fads, excellence is forever. About 8 years ago everyone and their mother, MS, Intel, Netscape, all the phone companies, a few power utilities and 40 other companies thought they could all build data centers and go into the web hosting business. They every one of them failed at it. Including Microsoft, who thought they could run MSN as a front end to every corporate network. So it begs the question - what makes this fad different than any other MS failed at?
What does Redmond get for its $40,000,000,000? Hard to see what the value proposition is.