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Yahoo Deal Is Big, but Is It the Next Big Thing?

Posted by Soulskill on from the keeping-up-with-the-googses dept.

mattsgotredhair brings us a NYTimes article discussing how Microsoft's bid for Yahoo contrasts against one of the core philosophies of Silicon Valley: looking forward. From the Times: "Microsoft may see Yahoo as its last best chance to catch up. But for all its size and ambition, the bid has not been greeted with enthusiasm. That may be because Silicon Valley favors bottom-up innovation instead of growth by acquisition. The region's investment money and brain power are tuned to start-ups that can anticipate the next big thing rather than chase the last one. 'This is the very nature of the Valley,' said Jim Breyer of the venture capital firm Accel Partners. 'After very strong growth, businesses by definition start to slow as competition increases and young creative start-ups begin to attack the incumbents.'"

4 of 159 comments (clear)

  1. Re:I really do not get it... by Anonymous Coward · · Score: 5, Insightful

    You can't compare the HP/Compaq merger to a Microsoft/Yahoo! merger. First of all, infrastructure plays a much greater role in the Microsoft/Yahoo! scenario. Yahoo! is heavily run on open source software, including PHP, FreeBSD and Linux. It won't look good for Microsoft if so much more infrastructure is running on software they have belittled for years now.

    So either they'll have to do like they did with Hotmail, and let it run on FreeBSD until they've basically re-written in from scratch to use their technology. Of course, that will be very costly, and likely nowhere near as good as the original (like we've seen with Hotmail). They'll be in the same position they are now, except having spent far more money.

    The HP/Compaq merger was far more about combining product lines, management teams, R&D, support teams, etc. That is, it was more about an organizational merger, rather than a technological acquisition.

  2. Re:I really do not get it... by Herschel+Cohen · · Score: 5, Insightful

    Well it really was not an offer. As I read it, it was a statement of intent. That is, most likely they plan to acquire shares from holders that are willing to sell directly to MS at a premium. Once a sufficient percentage is obtained they move to take over the company by a proxy vote. Control is final after a positive review by the DOJ and the EU.

    This is a hostile take over where the purchaser could care less what either the board and the management thinks or responds.

  3. Re:This is what MS did before and it worked back t by Herschel+Cohen · · Score: 5, Insightful

    Saying ... most wealthy, successful software company in the world is doomed to failure ... I don't read it that way, however, in business studies attempts to merge companies with differing cultures can devastate the acquiring company. Moreover, the business being fast paced can doom the pursuer to a more distant relative standing than the sum of the two companies' starting market shares. Take one of the examples you cited: HotMail, how long did it take MS to get that right? The danger is they may not have the time to get it right.

    I really doubt that MS will disappear due to this or other missteps, but that does not mean the probabilities are nil to none.
  4. Re:I really do not get it... by pallmall1 · · Score: 5, Insightful

    MS can afford to offer deeply discounted prices to advertisers in order to to eat up Google's marketshare.
    They can cut the price all they want in order to get more ads and advertisers, but that doesn't mean they'll get more traffic. Marketing is based on the number of people who see the ad and their demographic. If MS cuts the price without a significant increase in traffic, they'll only be reducing the value of their existing base.
    --
    3 things about computers: they're alive, they're self-aware, and they hate your guts.