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Why Microsoft Is Chasing Yahoo 245

Posted by CmdrTaco
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."
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Why Microsoft Is Chasing Yahoo

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  • by JCSoRocks (1142053) on Wednesday July 09, 2008 @10:47AM (#24117643)
    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!"
  • by ad0n (1171681) on Wednesday July 09, 2008 @10:48AM (#24117653)
    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.
    • by JCSoRocks (1142053) on Wednesday July 09, 2008 @10:59AM (#24117857)
      Well if I were a second rate, stale, mediocre, and unmotivated employee I might take it upon myself to use some of my free time to eliminate that page from Yahoo's index. Then I'd create my own page saying something similar (or worse) about the author of the story... and I'd make sure it was #1 if you searched for his name. :P
    • by kriston (7886) on Wednesday July 09, 2008 @11:02AM (#24117913) Homepage Journal

      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.

      .

      • by Anonymous Coward on Wednesday July 09, 2008 @11:34AM (#24118455)

        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.

        • Re: (Score:3, Funny)

          by madgeorge (632496)

          omg.yahoo.com anyone?

          How have I been ignorant of this for so long? And why(!) (bleeding eyes) have I been cursed to be exposed to it now? Why has my Dog forsaken me?

      • 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.
        • by CodeBuster (516420) on Wednesday July 09, 2008 @12:58PM (#24119845)
          The search results, even in the early days when the main Google page was still marked as beta (I remember using the beta version in 2000 when I was still at the uni), were (and still are although somewhat less glaringly now) superior to any of the established commercial operators (like Yahoo) at that time. It was clear even then that Google had an emerging franchise in an industry that was already packed with me too and also ran search companies (anyone remember HotBot, Lycos, AltaVista, etc...).
        • by jimicus (737525) on Wednesday July 09, 2008 @01:04PM (#24119931)

          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.

          I'd add another thing to that. This is my experience, your mileage may have varied etc etc.

          Way back before then - circa 1997 - AltaVista was king of search. However, around 1999 or so the results from AltaVista started to go down the tubes - most of the hits were either spam or totally irrelevant.

          Out of practically nowhere comes Google - with results which were actually useful and little or no spam. Doesn't take a superbrain to decide to stick to using Google. But the Internet is a fickle place, and it's a lot easier to visit an alternate website than it is to take your bricks & mortar business elsewhere. (For one thing, "there's only one shop in this town that sells N" is not a valid argument). The mighty can fall, and I don't doubt it will happen again.

      • by TubeSteak (669689) on Wednesday July 09, 2008 @12:05PM (#24118935) Journal

        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.

        How long does a company have to remain flavor-of-the-month before they get upgraded to preferred-flavor?

        And how many Dot Com Failures had Google's billions of dollars *cash* in the bank (as opposed to hemorrhaging venture capital) before they imploded?

      • by MightyMartian (840721) on Wednesday July 09, 2008 @12:10PM (#24119037) Journal

        Google was around before the Dot-com bust, and in the late 1990s was already showing itself to be a fierce competitor to Yahoo. Your knowledge of search engine history is pathetically incorrect.

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

        Research is *never* objective. Objectivity is the biggest myth of the current scientific paradigm.

      • Re: (Score:3, Insightful)

        by jellomizer (103300)

        Google has been around for quite a few years. I don't see it as a fad. Just like back in 1994 when people said Linux is just a fad.
        With software you may be first rate but if you don't innovate fast enough it becomes second rate.

      • Re: (Score:2, Funny)

        by nxtr (813179)
        Thanks for saving me time today by using acronyms in your comment!
      • Why do I get the feeling you only read the first 3-4 paragraphs of the article...

        The article really isn't about whether Yahoo is stale or second rate. In fact, it was talking about a particular period of time != present.

    • by LWATCDR (28044) on Wednesday July 09, 2008 @11:09AM (#24118021) Homepage Journal

      I think this is a bit unfair.
      I actually like Yahoo.
      I use the my.yahoo home page. I think it is better than the Google version.
      I actually like the directory. Sometimes I like to browse a subject and not do just a search for it. It is real handy when looking for things like towns in a state.
      I think Yahoo has it's strengths as does Google.
      I will admit that I wouldn't use my.yahoo if I didn't have firefox.

      • Re: (Score:3, Interesting)

        by quanticle (843097)

        Well, as long as we are exchanging anecdotes...

        I used to like Yahoo's mail. It was a pretty simple, basic web based mailbox. It didn't have much AJAX or other dynamic elements, but it was pretty easy to use and it was functional across many browsers.

        Then they replaced it with their Mail 2.0 abomination. Slow, clunky, prone to mysterious errors - it was like GMail's evil twin. After they introduced that atrocity of a UI, I've been using Gmail exclusively.

        • Re: (Score:3, Informative)

          by TheLink (130905)
          Just turn off javascript for Yahoo Mail and it switches to the "old mode".

          Some stuff doesn't work - you can't flag spam as spam (you can still delete them).

          But overall that's the version I've been using and it's fine for my purposes.

          In fact Gmail originally did not have a "no javascript" UI - they only added that later.
        • Re: (Score:3, Insightful)

          by bluefoxlucid (723572)

          GMAIL: Ajax, magic.

          YMAIL: Flash dog shit.

  • by Alaren (682568) on Wednesday July 09, 2008 @10:57AM (#24117811)

    Alright, the article is worth reading and forwards an an interesting and compelling theory about Microsoft's "real" reason for wanting Yahoo. (Can there only be one reason? Shouldn't there be lots?) But here's where it crossed the line into gross speculation.

    Google does have a perpetual royalty-free license, but $30 million was not all Google paid for the license. Evidently, Google is hiding some material terms of its patent settlement with Yahoo from the general public and its investors. Google had a legal obligation to disclose anything material that was likely to influence its future business operations, but Google's management subverted that obligation.

    That's couched in boring language, but it's actually a very, very serious allegation against Google and, given Google's usual careful approach, extremely unlikely.

    This article does little to convince me of Google wrongdoing, but a lot to remind us why business model patents make no sense and ought to be done away with. I can see the 361 patent playing into Microsoft's calculations, but if it's as important as this article suggests, Microsoft would be pointing that out to everyone who cared to listen... and paying Yahoo's asking price.

    So, I'd mod the article interesting and informative, but not especially insightful.

    • Re: (Score:3, Interesting)

      Actually, it makes perfect sense.

      Microsoft instead of proposing a more competitive deal has been busy trying to subvert the Yahoo Google deal by raising antitrust concerns, and even seems to have succeeded at getting the US Department of Justice to [investigate the deal].

      I've been wondering why the Microsoft shills on this site have been the ones protesting the Yahoo/Google deal the most. Now it makes sense.

      • by monxrtr (1105563) on Wednesday July 09, 2008 @11:56AM (#24118811)

        It only makes sense because Microsoft is floating upon an ocean of patent bubbles. The '361 patent is unenforceable in the real world. But it lets Microsoft get in on the Google paid search game, without possibly setting off a patent Armageddon war meltdown.

        Microsoft's main revenue source (very expensive questionable quality software) is under serious threat. Google main revenue source is not under serious competitive threat. Google would get that '361 patent invalidated in a heart beat if it was a serious threat to their business. Microsoft, however, will not undertake the same tactic to get in on the paid search game, because business method patents are practically synonymous with software function patents.

        Yahoo has nothing. It's no surprise corporate raiders would not take the bait. Any hidden asset value play of the '361 patent is an SCO disaster in waiting. But Yahoo is still in the game, has a chance down the line to be competitive against both Microsoft and Google.

        Such navigation is what Bill Gates considered "good business skills". But MSFT can't afford to pay for the '361 patent chip, and Yahoo can't afford to sell it. And the '361 patent chip is completely worthless in the real world, but billions in stock valuations are being swung around because of it. Maybe Microsoft is just counting on the outcome that Google wouldn't press the patent nuclear war button also (as Microsoft would at least attempt to retaliate against all of Google's on-line services).

        In the meantime, innovation and competition is stagnated, and consumers are worse off paying for lower quality products with higher prices -- ACROSS THE BOARD.

    • Re: (Score:3, Interesting)

      by xbytor (215790)

      Once you remove the 'hidden material terms' part of the argument, the rest of it mostly falls apart. And I would be very surprised if Google had left themselves potentially open to a charge of fraud of this magnitude.

      Up to that point, it was an interesting read.

    • by sampson7 (536545) on Wednesday July 09, 2008 @12:22PM (#24119235)

      I'm an attorney tangentially involved in preparing SEC documents for a major corporation. Based on my experience with how seriously companies take their disclosure obligations, I would be shocked if Google were actively engaged in hiding a "material" settlement with Yahoo.

      For what it's worth, materiality is a term of art -- and certainly any royalty paid by Google to Yahoo to settle a patent claim would almost certainly be material, likely and quantifiable -- which would likely trigger Google's obligation to disclose the potential liability in its 10-K and 10-Q.

      Is it possible that Google is playing fast and loose with its securities obligations, or that it has come up with some novel legal theory about why it wouldn't be required to report such a deal? Well, sure. People and companies do stupid things all the time. But is it likely....?

      Wow.... that's a really serious allegation to lodge without any "smoking gun". Interesting article, but I have to think there's an element of conspiracy theorism in it that does not sound credible to me.

    • I especially like how he says Yahoo's claim that MS isn't really interested can't be disingenuous, cause it could lead to trouble -- then accuses Google of the same sort of misbehavior. And doesn't address the apparent discrepancy. So yeah, it's interesting food for thought, but I don't think as a whole the article holds up under its own weight.
  • In other words (Score:3, Insightful)

    by MikeRT (947531) on Wednesday July 09, 2008 @10:59AM (#24117855) Homepage
    Once again a business method patent has stymied the development of a market. A bad idea that was obvious to everyone but lawyers and the courts for its ability to damage competition.
  • The article writer couldn't make up his mind if he was penning (1) an opinion piece, (2) a history of the deal, or (3) just trying to beat 19th century french novelists on wordiness.

    I skimmed it, but all I got is: they wanted to put Yahoo into play. Is that it? Anyone have the abstract?

    • The article is just a bunch of BS that sounds more like a conspiracy theory than anything.

      I'll tell you why Microsoft wants Yahoo in four words: internet search market share.

      It is a no-brainer. Google makes a majority of its revenue from ads displayed on its internet search. Why? Because they have 70% of the internet search market share.

      Think about this from the marketing perspective. I want to post an online ad to get people to come to my stupid e-store. I can cover 70% of the internet search market

  • by rs232 (849320) on Wednesday July 09, 2008 @11:11AM (#24118057)
    "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 [techuser.net] .. 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 ... :)
    • That is smoke and mirrors.

      Microsoft wants Yahoo because they provide e-mail for AT&T.

      They would have the contract with AT&T.

      Remember, contracts are what you use against people you do
      business with. See SCOX.

  • it seemed like the right thing to do at the time and I thought I was in love
  • by markov_chain (202465) on Wednesday July 09, 2008 @11:31AM (#24118415) Homepage

    We have never needed a good summary as much as this time!

  • by scorp1us (235526) on Wednesday July 09, 2008 @11:51AM (#24118757) Journal

    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.

    • by MightyMartian (840721) on Wednesday July 09, 2008 @12:23PM (#24119247) Journal

      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.

    • by Lord Grey (463613) *
      Microsoft already bought search, with the acquisition of FAST.

      This Yahoo thing is for web presence, not search.
    • Re: (Score:3, Informative)

      by UnknowingFool (672806)

      Many people have predicted the doom of MS with every little new competitor and/or technology fad. One of the things that has kept MS in the game is money. Lots of money. They still make profits on their core products which support their other not-so profitable products. Frankly if MS wasn't behind things like Xbox and Zune, those brands would have folded by now. While they are not bad products, Xbox hasn't been profitable until recently and Zune has a way to go. If they were independent companies, the

      • by scorp1us (235526) on Wednesday July 09, 2008 @02:52PM (#24121783) Journal

        I agree. With business being business, I am considering shorting their stock since I have not seen any new value being created. And customers buy value.
        Windows 95 was value.
        Windows 2000 was value.
        Office 95/97 was value.
        DirectX was value.
        Visual Studio 98 was value.

        XP was not value. (It was nothing substantial over w2k)
        Windows Vista was not value. (Negative value) .Net/Silverlight was not value. (Attempt to re-lockin developers, with POSIX un-compliance, whole new libs). C# is no value because it is 1/2way between C++ and Python (or Ruby).
        IE was not value.
        Office 2003/2007 was not value.
        Visual Studio after 2008 was not of value (a side effect of .Net)
        All Microsoft services are not of value.
        Virtualization is not of value (VMware leads)

        So up until about 2001 MS was providing value. Since then it's all been maintenance or catch-up. But during this period, competitors advanced. What MS had provided as value was commoditized. (Linux, OpenOffice) Or people started doing it better (Apple). MS does not have a value proposition anymore.

        As you indicate, they are floating on cash. If MS can't re-invent themselves, things rest on the bottom when there is no water left. Its like a ballistic trajectory, and without another rocket stage, it's going to come down. But MS does not operate in a vacuum. Ubuntu and OSX are my main reasons for supporting the short position. The EEE PC is nice anecdotal evidence of Linux providing sufficient value. I also like Qt as a good platform for Win/Lin/OS development.

        Further backing the short position is that there is no one or set of technologies that needs to be delivered. In 95-2000, we needed a stable kernel and apps, we needed networking. We got those. In 2001 we needed a safe, stable browser. We got that (in 2007 with FF2).

        I buy stock in what I use. This is good for me in the tech sector because I am ahead of the curve. I use FF, Apple, Yahoo, Google, Adobe, Verizon (FIOS). I keep watching Ubuntu. I'm not pining for anything Microsoft has in the pipeline. I am pining for FF and Apple, and Adobe (AIR, though I'd rather a W3C platform).

        I'd get behind MS again if they ever brought value back, but they are just focusing on taking it away from others (.Net, SilverLight, Search). That is a sign to me that they don't know what to do next either.

    • Surprise, someone at /. didn't RTFA. The article's argument is that this is about buying a patent for "paid search" (like AdSense/AdWords), not software.

  • Is it or isn't it? (Score:3, Insightful)

    by ktappe (747125) on Wednesday July 09, 2008 @11:58AM (#24118837)

    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

    Contradictory statements. If it's well-known that they've been negotiating since 2006, then (by definition) most people would know that.

  • If Google is number one and Yahoo! and MS are contenders for the number two spot, then MS buying Yahoo! is just a way for MS to jump ahead in the standings. MS-Yahoo! might even contend for number one if MS combined the stats. Multi-billion dollar industry there.

  • Legtimacy (Score:4, Insightful)

    by fermion (181285) on Wednesday July 09, 2008 @12:21PM (#24119211) Homepage Journal
    MS has been a failure at search. This was not a big deal until search became ad revenue, and ad revenue became the new profit center in the IT world. Like the World Wide Web, MS failed to innovate, but unlike the WWW, MS was not able to use it's monopoly of the desktop to compensate for that basic, persistent, and enduring lack of imagination. MSN remains the laughing stock of search.

    Even with billions of dollars in the bank, 90% of the browsing population using IE, which forces people to MSN, MSN still has less than 1/2 the market of Yahoo, and not even twice the market share of AOL. This tends to indicate that MS has no clue how to direct users to content, but that they don't even know how to learn how to do such a thing. Basically, because MS cannot force MS Windows users to search with MSN, beyond what already exists in IE, and MS cannot undercut the prices of the product, as it did with XBox, MS is not succeeding in the search market. Those are it's two primary tools for success, and neither is suitable here.

    The only option is go after Yahoo. There are two benefits to this, only one seems to be covered in the link. By far the most important is that the combined Yahoo/MS market share will be 35% This should help market ads. The downside risk is how many people will stop using Yahoo because of MS ownership, and the changes that the clearly incompetent MS staff(remember MSN only has 10%, that is for a reason) make to the service. This gives MS legitimacy in the marketplace.

    The second, as implied by the link is that MS may be able to make trouble for google. This will result in what MS does best, funneling money from productive interests to fuel it's unproductive coffers, but will not likely affect Googles market share.

    Here is why. Google is still innovating customer service. There are free apps on the web to do all sorts of stuff. They know their core business, bringing eyeballs to ads, and do what it takes to keep those eyeballs happy. Google is free to do whatever it takes. MS is not free to do whatever it takes. For instance, why is MS charging a subscription fee for MS Office. Why aren't they putting a Web version on MSN. Tell me how many people would create an MSN account and use it as their portal if they got to use even a limited version of MS word for free in the deal.

    Why indeed. There are only two possible reasons. First, MS does not have the technology to do what Google is already doing. Second, the MS Office franchise, stale as it is, is still too valuable for MS to use to drive what is clear to become the future profit center for any large software concern. Again, MS looks back, everyone else looks forward. This is not bad, MS makes a lot of money on it, but it why MS can and does overpay for new tech(re: facebook), and why Yahoo is a deal that has to be done, even it eventually fails and means the end of Yahoo, and 80% market share for google.

    • Tell me how many people would create an MSN account and use it as their portal if they got to use even a limited version of MS word for free in the deal.

      There's even someone [thinkfree.com] they could license it from!

      Imagine the irony -- MS paying another company for an online version of office, to give to people for free!

  • by raddan (519638) on Wednesday July 09, 2008 @12:40PM (#24119539)
    He painted his room pink.
  • by jav1231 (539129)
    Because Microsoft has an entitlement mentality when it comes to technology. They want it because they want it.
  • There's a lot of speculation here, but it's all just conjecture. There's definitely not any new facts in this article, and it is only "analysis" in the sense that it contains a much larger volume of speculation than most of the 1,000,897 other articles on the same subject. Obviously a new definition of the word, "analysis" of which I was not previously aware ...
  • by acb (2797) on Wednesday July 09, 2008 @01:10PM (#24120037) Homepage

    I think MS's designs on Yahoo have to do not with search but with open technologies like YUI [yahoo.com] 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.

    • Patent shopping? (Score:3, Interesting)

      by rts008 (812749)

      See, that is more along the lines of what I've been thinking also. I think that the search is a significant part of the deal, but not all of it by a long shot-more like icing on the cake.

      Yahoo! has an interesting patent portfolio [uspto.gov] that may be a bigger target than just the search.

      I also have to wonder if MS had anything to do with Carl Icahn stepping into the picture to 'stir the mud puddle' and help push Yahoo! towards MS.

      It will be interesting to see how the dust settles on this one.

  • by thetoadwarrior (1268702) on Wednesday July 09, 2008 @02:00PM (#24120773) Homepage
    Yahoo's messenger and MSN are two of the larger messengers and if MS locks them in together and then tries to tie those users into their other services then it might be a benefit along with MS actually having a search engine someone uses.
  • Microsoft passed on buying Overture (and its patent on paid search) due to antitrust concerns. So Yahoo! bought them. Now Microsoft wants to buy Yahoo! (and squeeze Google using the patent?). What happened to the antitrust issue?

    Yahoo! Is playing both sides against each other in an attempt to collect $trategic inve$tment capital from Google and cause their stock price to climb. But Google could just sit back and say, "See you in court with a copy of the Sherman Antitrust Act." to Microsoft.

  • flawed analysis (Score:3, Interesting)

    by toby (759) * on Wednesday July 09, 2008 @03:12PM (#24122189) Homepage Journal

    I won't speak for the rest of it, but there's a huge problem, IMHO, with these assertions:

    1. Adobe could have an antitrust complaint against the purchase. - I just can't see what that would be. Anyone?

    2. Buying Yahoo! does very much for Silverlight. How exactly? Silverlight is a threat to Flash by simply existing, because MS *already* has the great inertia of the incumbent monopolist. What has Webmail got to do with pushing Silverlight??

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