Scott McMahan
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Microsoft Yahoo Analysis
TUESDAY, FEBRUARY 05, 2008
Posted by: Scott McMahan | more..
2,150+ views | 150+ clicks
Color me perplexed. After the announcement of the hostile takeover bid Microsoft launched for Yahoo, and reading both computer industry and business (Wall St. Journal, NY Times) analysis pieces, I don't get it. The only thing a successful hostile takeover would accomplish is the destruction of Yahoo.

From what I read, MS wants the technical infrastructure and brain talent of Yahoo, because MS has shot blanks in the online world since Bill Gates ignored the Internet in his Road Ahead book. But Yahoo is based on FreeBSD and the UNIX and open source and free software culture in a deep, deep way. Anyone with any technical talent will be the sort of person who would not work for MS nor fit into its culture. Anyone who was into the UNIX culture would be long gone before the ink dried on this deal, and MS would get nothing in the way of technical talent which would help them. If I don't know anything else, I know no Linux or BSD developer who is part of that culture would want to work for MS.

And, historically, when MS buys or competes with an existing system, they gut it and replace it with their own technology. Based on their past history with Sybase (port of SQL Server to Windows), OS/2 (replaced by NT), Hotmail (migrated off UNIX to NT), etc MS will throw away any technology they get in the deal.

So the only thing this takeover will really do is kill Yahoo. That's not necessarily bad (do people actually use Yahoo?), but it's not worth MS's time or cash to take over the company.

MS may want Yahoo's customers for online advertising, but that's sort of a moot point if they kill off Yahoo. They could be doing what Borland did to Aysmetrix Supercede a few years ago: Buying it and killing it off to make customers migrate to their own solution (Borland's JBuilder), but this is risky since most people who are not your customers are not for a reason (JBuilder was an awful, awful package) and will abandon ship as quickly as practicable.

The deal will probably happen. Yahoo is an also-ran that's going nowhere, and shareholders will gladly cash out while a premium on Yahoo shares is being offered.

Category:  Computers and Web

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