Microsoft Going After Yahoo! Again

Corrupt writes "Microsoft on Monday released a letter that supports investor activist Carl Icahn's efforts to unseat Yahoo's board, as well as confirming its interest to explore a bid to buy the entire company, or just its search assets, with a new board."

Comments

Re:I found it surprising

[hey!]

A company with Microsoft's resources should be able to come up with a better business plan than a buy-in. I think they're impatient, for some reason not yet disclosed.

It's all about Google.

If I were an MS strategist, Google's search business wouldn't scare me. If you lost sleep every time somebody made money doing something technological you'd go mad.

I'd be a little more concerned with Google's foray into online office suites, but I'd be fairly confident that wasn't a serious problem in the short to mid term.

The thing I'd be freaked about is Google's casual way of generating APIs for its popular services. That hits Microsoft where it lives.

This is a relatively low cost, low risk game for Google. Nobody expects them to provide soup-to-nuts service for all your IT needs; they're just throwing API shit against the wall. If it sticks, good for Google, bad for MS; if t doesn't, MS feels no pain, but neither does Google. It's just another interesting idea from Google.

This is like assymetrical warfare: MS is the conventional force, and Google is the guerilla force. Google chooses when and where to stike, and if it fails it doesn't cost them much. Tactical failures can even be strategic victories if they provoke a costly response. From MS's standpoint, it is necessary to limit Google's ability to strike when and where it will, and get away without much loss no matter the outcome. One thing you can do is start to poach on Google's engineering talent; taking people out of a team is disruptive. Another thing you can do is try to hurt them in places where they live, so you want them so focused at keeping their ad revenue flowing that they can't do anything else.

Google's strategic weakness is that it doesn't provide full solutions. It is an interesting technology company, not a product company. That's good for MS because once Google (or anybody else) provides a complete replacement for Office, Exchange and Sharepoint, bad things are going to happen to MS.

Gaining control of Yahoo makes sense for several reasons. First, it keeps them from cooperating with Google, which is the opposite of what MS wants. MS wants Google to have to work harder to get ad revenue, not less. Second, Yahoo is a product company, like MS; it could be the first to offer the complete, MS free product stack. Equally bad, Yahoo could goad Google into upgrading its products so they look more like a viable replacement for MS to enterprise customers.

The picture MS would prefer is Google struggling to maintain ad revenues, and facing a steep uphill battle in product adoption and API mindshare when it looks at MS dominated product areas.