Is Microsoft just Screwing with Yahoo's Mind?

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.'"

Comments

Treading Water

[wombatmobile]

Yahoo is treading water. Microsoft is treading water. Neither company has innovated to grow new business for the last 5+ years. Meanwhile, Google has created growth. It has built and grown a large, growing advertising business. Now Microsoft has a paw on Yahoo, treading water next to it.

Re:Treading Water

[erroneus]

That's a fact and I'd add more to this by saying that Microsoft is "leadership" and "vision" poor. They are not likely to be short on talented or skilled people. The reality is the decisions and priorities that Microsoft is following are what's leading to its hardships at the moment. They had defined "computing" as we had known it for around 10 straight years but that position has slipped quite a bit and pretty much everyone is doubting Microsoft's vision and wisdom in the industry -- even the end users -- and it would seem Microsoft has yet to realize that they no longer truly wield the power over people's minds that they once had. (Or perhaps they are realizing it and are attempting to compensate in other [failing] ways?)

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.

Re:Treading Water

[webmaster404]

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.

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.

Re:Treading Water

[abigor]

Actually, it's flat because MS is transitioning from being a pure growth stock to a blue chip stock, complete with dividend payouts, which are still too small. Successful blue chips generate huge profits and sustain predictable growth year over year, but their stock prices aren't particularly volatile. MS is not paying large enough dividends, causing the stock to flatline (this may have changed recently, as I'm not up to date with their latest actions).

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.

Re:Treading Water

[rucs_hack]

Purchasing smaller companies that produce products you want to incorporate into your business is standard industry practice...

Re:Treading Water

[Anonymous Coward]

Google represents the current age? What exactly has google done that is innovative aside from adsense? Search was already done, it was just an incremental improvement. And then they did what you say Microsoft did, they purchased. They bought maps, blogging sites, on-line office suites. Googles products are driven by acquisition and not innovation.

Since when was business in the USA...

[zappepcs]

anything like fair?
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 /. this should come as no surprise AT ALL.

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:I wish MSFT would screw with me, like that.

[mritunjai]

Please keep in mind that stock price inflation is due to "premium" put up MS and speculators have driven up the price which *would* fall down if the deal doesn't go through.

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.

That's just about the single stupidest idea...

[Etherwalk]

I've ever heard. And I've played catch with rock hammers.

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.

Re:Hard to tell what's going on ...

[blowdart]

See it's weird; I thought that the google proposed partnership was a spoiler and a non-serious offer just made to burn up more of Microsoft's warchest by giving Yahoo a plausible reason to drive the price up. And the goggle thing dissolved away very quickly, whereas the Microsoft offer is still on the table.

Nonsense

[sjbe]

Nobody makes a $40B+ offer just to screw with another company. That's WAY too much money. While business disruption might be a desirable side effect, especially if the merger doesn't go through, it isn't why MS made the offer. When MS tried to buy Intuit, it was because they wanted to dominate personal finance software, not because they wanted to screw with Intuit. If memory serves they were blocked from the merger by the government due to the effective monopoly the merger would cause.

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".

Re:Fixes

[hairyfeet]

Actually I think that if MSFT can't get Windows 7 out the door quick enough,or if it does and it carries the Vista stink of failure(yes,I know some folks like it.But enough folks have been burned that the WinMEII label won't be going away) I really wouldn't be surprised if they took one out of Apples playbook and bought a Linux or BSD to use as their next OS.It really wouldn't be hard for them to bolt a proprietary GUI on top of a Linux or BSD kernel and simply add a parallels style "compatibility layer" using the .dlls from WinXP and Win98.

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.

Who on earth would mark you Insightful?

[LibertineR]

What product makes Microsoft their greatest profit? Answer = MS Office.

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.

Re:Hard to tell what's going on ...

[Fulcrum of Evil]

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.