It’s been long rumored and now it’s finally happened. Microsoft has made a public, unsolicited bid for Yahoo, which you can read in this Microsoft press release. This press release by Yahoo states that the company’s “Board of Directors will evaluate this proposal carefully and promptly in the context of Yahoo!’s strategic plans and pursue the best course of action to maximize long-term value for shareholders.” Of course they have to consider it; they have a fiduciary responsibility to consider offers like this.
This is a smart move, however, for both companies and employees and customers. And, yes, shareholders. But right now, I’m most interested in the customers, because that’s what’s going to benefit both companies in the long run.
In Microsoft’s press release, I think Steve Ballmer has it right, “We have great respect for Yahoo!, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market,” said Steve Ballmer, chief executive officer of Microsoft. “We believe our combination will deliver superior value to our respective shareholders and better choice and innovation to our customers and industry partners.”
It may sound like corporate PR talk, but this time around I think this positive positioning is correct. Here’s how I see it:
Microsoft needs some help in the web world. Try as they might, the company hasn’t been able to get its act together on par with what it can do and what customers would like to see and what its developers would like to see. It keeps getting biased by Windows and Office–which makes complete sense. They are, after all, hugely successful for Microsoft. But that’s not where the market opportunities end. And that’s where Yahoo comes in. Yahoo has for a long time been a fairly successful player in the online game. They have run into a rough spot and hence their stock has been going down and layoffs are on the way, but fundamentally they have some great web assets–Flickr being one of my most favorite. Microsoft can leverage its complementary assets–developer community, advertisers and the like to bring greater value to everyone.
Online, there’s money to be made with more and better ads. Yes, more money. But customers will benefit because properties, such as the Flickr image sharing service can expand to integrate into other offerings–particularly from Microsoft’s pool of products. And this model, which has worked for Yahoo can work in other areas two…if only Yahoo could invest more R&D. That’s where Microsoft comes in. It has the money chest to make new efforts happen. And with Yahoo it hopefully can share some of its bay area engineering magic.
Now there are some caveats here. With Yahoo’s slump I’m guessing some of the key engineering talent and know how has left. That may or may not be an issue. Yahoo also has a culture that’s more open cube-like than Microsoft’s “everyone gets a door” model. Structurally this may sound insignificant, but it’s turf like this that ruffles people’s feathers when change is on the way. Again, I hope in a Microsoft-Yahoo acquisition, that it won’t scare away the people you really want to see work together.
I hope also this could mean we’d see more ink in the web. Wouldn’t it be cool if Flickr supported ink directly for annotation? And if Yahoo could leverage Microsoft’s developer model and ecosystem there’s huge opportunity here. It’s things like this that have me excited as a developer and as a user.
Who knows if this kind of mega-acquisition will be OKed by the regulators. If it isn’t, maybe Yahaoo can get back on its feet, but then again I see clouds of Lycos on the horizon. Fingers crossed that the winds will keep them at bay.
Now if Microsoft would just buy twitter and integrate ink and media content there too I’d really be impressed. 🙂
There’s a bunch of coverage and commentary on this offer over at TechMeme. Well worth the read.