Gates Explains Microsoft's Need for Yahoo

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.""

Comments

Why not save $40 billion then?

[suso]

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.

Brute force and ignorance

[Lilith's Heart-shape]

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.

Re:Brute force and ignorance

[peragrin]

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.

Re:Brute force and ignorance

[naoursla]

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.

Where have I heard this before

[h4rr4r]

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.

Problem is...

[JamesP]

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.