A few initial thoughts on the proposed Microsoft acquisition of Yahoo that was announced today:
Microsoft is a software company whose track record in content and advertising is not so hot. Yahoo still has some fantastic content, both internal and user-created, and they’ve by and large been able to monetize well, but Yahoo is too big, too slow, and lacks a clear vision of their path forward. Their stock is way down and they’re an acquisition target. Microsoft has the resources to make the acquisition and on paper, it looks like a good matchup (although neither of them has done well in the search area). Still, I don’t think it’s going to turn out well for them in the end.
Why? Simple. Yahoo’s problems will not be solved by the people who took five years to bring us that POS that is Vista.
I expect that the deal will go through sooner or later, and then the integration will be long and ugly. The Yahoo! brand may or may not survive; Microsoft has managed to keep their branding off of XBox but I wonder whether they’ll be able to resist rebranding Yahoo. And certainly some core Yahoo properties will get Borged into Microsoft; I don’t expect YIM, Yahoo Mail, and maybe even My Yahoo itself to survive intact. Some of the spin I’m seeing is that Microsoft is looking to Yahoo to add some social expertise to their current mix; which would imply that Flickr will probably make the cut, as well as del.icio.us and hopefully some of the the other acquisitions like MyBlogLog or Upcoming as well. No matter how you slice it, though, this is going to cost a lot of Yahoos their jobs.
Eventually, you’ll have one homogenized behemoth that still won’t be able to beat Google at search. Whether it will still be able to provide quality (and monetized) content that people find useful — we’ll see.
Superbowl Sunday update: Google weighs in, and they’re not happy.
“Yahoo’s problems will not be solved by the people who took five years to bring us that POS that is Vista.”
ROFL. For real. 😀
And let’s not forget that a website, if it has errors, can’t just “have errors” until version 2.0 comes out. This is Microsoft’s MO, the marketing ppl decide the software release dates, NOT tech. Hence, stuff comes out when it really needed a few more months of beta (or alpha) testing. And users are forced to just deal with it until tech finishes what they told marketing they needed extra time for anyway.
Big prototype, big PR, big press releases — but not always delivery on all the promises. That’s Microsoft.
I think MSFT will leave much of Yahoo alone. Most of the integration will be on parts of the business that consumers don’t see — ad systems, sales, back office, servers, ops, infrastructure, mail/IM platforms, etc. This is where they’ll get economies of scale and be able to leverage synergies between the user bases.
My guess is that MyMSN users will be moved to My Yahoo (which has 10x the users), MSN Search users will migrate to Yahoo search, etc. I don’t expect you’d see “Microsoft” printed on Yahoo properties, since the Yahoo brand is probably worth $20B of that $45B.
You could be right, Seamus, but at the very least I think that Microsoft is going to slap ‘Live’ all over everything … ‘Flickr Live’, ‘Yahoo Live’ etc etc…..