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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.'"
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.
anything like fair?
/. this should come as no surprise AT ALL.
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.
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Didn't Yahoo's stock price go up from this, while the price of MSFT stock went down? Isn't Microsoft doing more harm to themselves?
Besides, I thought Balmer was in charge now. What's with all this talk about Bill?
The QuickBooks guys. But ten seconds of Google could have told you that.
TFA is being hyperbolic to claim that the purchase bid "alone has some value for Microsoft." Not quite. We're definitely in "a little bit of both" territory here
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.
Thank you Dave Raggett
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).
"Redmond's real goal may be simply to poach people from Yahoo, and this deal could help them do just that.'"
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?
"I'd rather have a full bottle in front of me than a full frontal lobotomy"
You mean Fear, Uncertainty and Doubt aren't Microsofts' 3 main products?
With SCO possibly going private, welcome to FUD 3.11.
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.
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.
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".
And Frodo could have hopped on the back of a freakin' Eagle, flown the 2 hour trip in to Mount Doom, and dunked the ring and been home in time for dinner.
But where's the adventure in that?
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
If MS buys Yahoo, what happens to Zimbra? Yahoo just bought them, and I'm 100% sure MS will kill that project the day they take over, they don't want any competition for exchange, and certainly not open source competition.
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.
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.
But where's the adventure in that?
No homoerotic overtones?
www.purevolume.com/martyd
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.
ACs don't waste your time replying, your posts are never seen by me.
Go Blizzard! They not only run on Macintosh, they run on Linux with Wine too.
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.
"We returned the General to El Salvador, or maybe Guatemala, it's difficult to tell from 10,000 feet"