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Why Microsoft Is Chasing Yahoo

Posted by ryuzaki0 on from the jeeves-wanted-to-much-money dept.

latif writes "Microsoft has been chasing Yahoo for quite a while now. Most people think that it all started with Microsoft's acquisition bid for Yahoo, but this is not so. It is well-known that Microsoft and Yahoo have been negotiating since at least May of 2006, and may have been negotiating since 2003. I have done a thorough analysis utilizing information made public over the past five years and my analysis suggests that most people are completely wrong about what Microsoft wants from Yahoo."

17 of 245 comments (clear)

  1. The reason is obvious! by JCSoRocks · · Score: 5, Funny

    Microsoft just wants to make their name really exciting. When they buy / merge with Yahoo! they can combine the names and all of a sudden "Microsoft" becomes, "Microsoft!" - the most exciting company ever! When that happens be on the look out for "Windows 7!"

    --
    You are using English. Please learn the difference between loose and lose; they're, there, and their; your and you're.
    1. Re:The reason is obvious! by syrinx · · Score: 5, Funny

      I was guessing Microhoo! Then when they merge with Google/Youtube, they can be Microhoogletube!

      Add in Oracle and they can be Microhoogletubacle!

      --
      Quidquid latine dictum sit, altum sonatur.
    2. Re:The reason is obvious! by Temujin_12 · · Score: 5, Funny

      When that happens be on the look out for "Windows 7!"

      Windows 7! = Windows 5040?

      --
      Faith is a willingness to accept something w/o complete proof and to act on it. Reason allows you to correct that faith.
  2. Perfect Strangers ? by ad0n · · Score: 5, Funny

    From the linked article: The Microsoft bid never made sense from a business perspective either. Yahoo has always had stale search offerings, second rate search technology, and a mediocre unmotivated workforce. Yahoo derives its value primarily from the massive web-traffic the company controls, but the cost of controlling this web-traffic is likely to be prohibitive for Microsoft

    Second rate, stale, mediocre, unmotivated: sounds like a perfect fit for the Microsoft empire.

    1. Re:Perfect Strangers ? by kriston · · Score: 5, Insightful

      Wow. Yahoo definitely does not have stale search offerings or second-rate search technology.

      Just because you're not the flavor-of-the-month search engine doesn't mean your technology is stale or second rate.

      The only thing I can agree with is the unmotivated workforce--but they are in no way a mediocre bunch.

      YHOO survived the dot-com bust because they are a well-diversified and complete web service company.
      GOOG is striving to become that, but GOOG is flavor-of-the month because GOOG is the glamorous company that avoided the dot-com bust because they started later.

      Come on, try to be objective when comparing YHOO and GOOG.

      Good press does not necessarily mean better company.

      Bad press does not necessarily mean worse company.

      It's a shame so many of you feel this way without any sort of objective research.

      .

      --

      Kriston

    2. Re:Perfect Strangers ? by Anonymous Coward · · Score: 5, Insightful

      Just because you're not the flavor-of-the-month search engine doesn't mean your technology is stale or second rate.

      Except that Google's become synonymous with search and has pretty much owned search for the last half decade -- and Yahoo has made no appreciable gains. I would say by definition Yahoo is at least second-rate. I don't think you can call a market leader for years running, with a brand ubiquity like they've got, a "flavor of the month".

      When was the last time you heard someone tell someone to "just Yahoo that" or "I AltaVista'd so-and-so"?

      I work with several ex-Yahoos, they're all wonderful and bright people... but Yahoo needs to adopt the Avis mentality and try harder. They're behind in search, Musicmatch->Y! Music didn't pan out, and they've got a whole raft of other unneeded sites/services. (omg.yahoo.com anyone ? )

      Living in denial about your competitive ecosystem is the surest ticket to irrelevance and extinction.

    3. Re:Perfect Strangers ? by Captain+Splendid · · Score: 5, Insightful

      but GOOG is flavor-of-the month

      Yeah, they're so flavour of the month, I've only been using them since before the turn of the century.</sarcasm>

      Note to all the clueless idiots out there: Google got popular quick because they had a search page that would load in under a minute back when most of us were still on dial-up. Having search rankings that worked as well as anybody else's was just icing on the cake. The hardcore techies might have gone nuts over their algorithms, but the rest of us were just happy to get our search results quickly and not wait for ages for a bunch of cruft and advertising to load first.

      --
      Linux, you magnificent bastard, I read the fucking manual!
  3. Re:Jealousy by stokessd · · Score: 5, Insightful

    ARE there software companies that people actually like?! Google used to be up there, but they keep poking at the "do no evil" mantra. Every other software company I can think of has a core group of users that like the product, but those same folks also seem pretty ambivalent about the company.

    It seems that the hardware companies get the love because you can touch the shiny. Examples: Tivo, Apple, Harley Davidson, Crispy Creme...

    Sheldon

  4. Comment removed by account_deleted · · Score: 5, Interesting

    Comment removed based on user account deletion

  5. the answer to Why Microsoft Is Chasing Yahoo by rs232 · · Score: 5, Interesting

    "In July 2001, the US patent office granted Overture US patent number 6,269,361. Also known as the '361 patent, it covered the basic paid-search bid-for-placement advertising model"

    "In July 2003 Yahoo acquired Overture in a mostly stock deal valued at $1.63 billion"

    "The peculiar thing about Microsoft Yahoo negotiations is Microsoft's insistence on owning/co-owning Yahoo's paid-search assets "

    "Microsoft believes that by being clever about the deal terms Microsoft can practically get Yahoo's big fish patent licensee to fully reimburse Microsoft for whatever Microsoft pays for Yahoo's paid search assets"

    "So, who is Yahoo's big fish patent licensee .. By simple elimination it has to be Google "

    --

    So basically Microsoft gets Google to finance the Yahoo takeover and then gets Google to pay MS revenue out of its (GOOG) own paid search business.. PURR of EVIL ... :)

    --
    davecb5620@gmail.com
  6. Re:"Utilizing"? by 140Mandak262Jamuna · · Score: 5, Funny

    I concur with the most recent ancestor poster. I object to repeatedly tautologically redundant grandiloquence. I eschew such verbiage diligently. This very response shows you all that I am the very epitome of plain talking simple folk, scratch scratch, the very epitome of rustic linguistics.

    --
    sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
  7. MS-YHOO would never work. by scorp1us · · Score: 5, Interesting

    While I am aware that implementation doesn't have any real bearing on the task at hand, it does affect the culture. Yahoo makes use of open source technologies (as does Google.) Microsoft only uses Microsoft technologies. When they bought Hotmail (and subsequently turned it into a dump) they replaced the BSD boxes with Windows at a ratio of 1 to 5, (5x many windows boxen) in order to support the load.

    Now Microsoft wants to buy search. Given that "search" is basically a text box that returns URLs, and Microsoft already has that capability, one has to look at what is the difference between MS and Yahoo? Why is Yahoo more valuable than Microsoft in paid search? Really, I don't know. But I can guess. Yahoo doesn't care if you're using Microsoft technologies. This has two sides - 1) you get equal support in FF and IE, 2) developers don't have to use Microsoft technologies. The "not invented here" does not apply. It's about getting a job done.

    Buying Yahoo won't fix the problem if Yahoo is forced to change to the MS way. Obviously it's not worked for them.

    I think MS is just buying time if they think they can do what they've always done. Clearly, the decision to buy yahoo search is the brain child of a business man with no appreciation of why things the way they are. If MS is going to buy Yahoo, then they have to admit defeat and not see it as acquiring static property to be added to a portfolio. They have to buy Yahoo then learn why they failed, or better learn why they failed first.

    MS is rife with "not invented here" egoism: IE (Netscape), .Net (Java), SilverLight(Flash), Windows (BSD/Linux), and now Search. I can understand why a company should drink their own cool-aid, but when people start dropping, its time to change the formula.

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    1. Re:MS-YHOO would never work. by MightyMartian · · Score: 5, Insightful

      Now Microsoft wants to buy search. Given that "search" is basically a text box that returns URLs, and Microsoft already has that capability, one has to look at what is the difference between MS and Yahoo? Why is Yahoo more valuable than Microsoft in paid search? Really, I don't know. But I can guess. Yahoo doesn't care if you're using Microsoft technologies. This has two sides - 1) you get equal support in FF and IE, 2) developers don't have to use Microsoft technologies. The "not invented here" does not apply. It's about getting a job done.

      It's called a "brand name". Microsoft, since its first foray on to the Internet with MSN in 1995-96 has never been able to produce a popular online presence. Guys like Lycos, Altavista and Yahoo were already filling the search market, and Microsoft was unable to puncture their dominance. Google, of course, pretty much kicked the shit out of Yahoo, which now holds a very distant second place, and yet, Microsoft still isn't on the map. I think Microsoft (correctly) has come to the conclusion that it matters not at all what they do, people don't care about msn.com or live.com. They go into Tools-->Options when they get their brand new Windows computer and change it to google.com. Even having a search box that defaults to Microsoft's search has failed, as basically threats that the EU is going to go medieval on their ass have pretty much forced them to open it up more easily to competitors (read: Google).

      With more and more apps set to be delivered via the Web, this is about getting a platform that they have a hope in hell of someone actually using. I still think it will fail. Yahoo is, as I said, a very distant second place. Google is indeed the new Microsoft, and as with Microsoft's competitors in the past, Microsoft is finding itself being very effectively locked out of a very important market.

      I'm not at all comfortable with yet-another-computer-monopoly, and I don't buy at all into Google's "do no evil" mantra, since, so far, they've done plenty. But there's a great deal of irony. It couldn't have happened to a nicer company.

      --
      The world's burning. Moped Jesus spotted on I50. Details at 11.
  8. Re:Pretending they have a chance. by Toreo+asesino · · Score: 5, Insightful

    Yup. Over indeed it is, as their crashing stock and sales shows......

    Wait a minute....

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    throw new NoSignatureException();
  9. Re:Pretending they have a chance. by Mongoose+Disciple · · Score: 5, Interesting

    I wish I could mod this post "-1: Wishful Thinking."

    No matter how much you hate Microsoft or boldly state that their business has obviously failed, it doesn't actually make it true. Open Office is causing MS revenue problems? Yeah, right. Let's try to stick to discussing how things are in the world we actually live in.

    As far as this goes:

    At best they can crush and rob Yahoo, but that won't do anything to Google or anyone else who wants to run services with free software.

    If TFA is correct, they could do an awful lot to Google by consuming Yahoo. Not by competing in the marketplace but with the terrible power of patents.

  10. Re:Pretending they have a chance. by speedtux · · Score: 5, Interesting

    Microsoft's stock performance has at best been average compared to the NASDAQ during the last 10 years. IBM has actually been a stronger performer. Microsoft's spectacular growth years were between 1995 and 1998.

    Microsoft's 2008 Q1 income sounds kind of impressive (20-25% growth over last year) until one realizes that that is due to exchange rate changes, not new business.

    Microsoft Live has about as much mindshare (search volume) as Yahoo's failed Yahoo 360. Clearly, Microsoft is aiming for the very top somewhere, but not in on-line services.

    http://google.com/trends?q=microsoft+live%2Cyahoo+360&ctab=0&geo=all&date=all&sort=0

    Blogspot alone trounces Microsoft's entire Live effort.

    http://google.com/trends?q=microsoft+live%2Cyahoo+360%2Cblogspot&ctab=0&geo=all&date=all&sort=0

    Time to look for another job, perhaps? Or can we look forward to another FUD campaign from Steve "200 patents" Ballmer?

  11. Pushing Silverlight/Windows Media, killing AJAX by acb · · Score: 5, Interesting

    I think MS's designs on Yahoo have to do not with search but with open technologies like YUI and popular sites like Flickr. With an acquisition of Yahoo, MS could kill YUI and various other open-source technologies, in a way that it has done before. (In the late 1990s they acquired Bay Area start-up DimensionX, who then made the Liquid Reality Java VRML toolkit. Liquid Reality was buried and the DimensionX developers were moved to MS's ActiveX division.)

    Meanwhile, Flickr (the number 1 photo-sharing website by far) would fit into MS's standard-controlling strategy. Millions of users visit Flickr to share their content and see others' content. If all one's friends and photo-sharing communities are there, that's incentive to not jump ship to a rival site. If Flickr's AJAX/DHTML web site was replaced by a Silverlight application ("enhanced" with some Vista Aeroglass-style effects, of course), all these people would have to install Silverlight. Additionally, Microsoft could drive adoption of their Windows Media still-image standard as a replacement for JPEG, by recoding all the hosted images to WM format and serving it out only as such. All of a sudden, Silverlight is massively more popular, and WM is a major format for photographic still images.