Monday, April 7, 2008

Yahoo to Microsoft - You're a bully Steve !

In a letter from Jerry Yang and Roy Bostock to Microsoft, Yahoo! carefully, and somewhat artfully, countered the letter sent by Steve Ballmer to the Yahoo! board just a couple of days ago.

Ballmer's letter, covered here, gave Yahoo! three weeks or close a deal 'or else'.

Yang stated: "We consider your threat to commence an unsolicited offer and proxy contest to displace our independent Board members to be counterproductive and inconsistent with your stated objective of a friendly transaction".

Regardless of how you feel, this is now getting really interesting (If there weren't hundreds of jobs on the line, I would have said 'fun').

The most-visited portal on the Internet vs. one of the largest companies on the planet.

This is war! Hostile takeover attempt. You bet ya.

Reality. My take on this whole deal hasn't changed from the start. Two cool companies, in very different ways. A bad deal for MICROSOFT at the price, that will inevitably. sooner or later, be a 'done deal', simply because of our society's two biggest enemies - 'power' and 'greed'.

It may sound like an oversimplification but the fact remains that Microsoft could do a lot with that money (including innovating from within?) and Yahoo IS very valuable, but not at the price Microsoft offered (or even close).

As the day goes on, I'm sure many will add their two cents. Keep an eye out for Mary Jo Foley at ZDNet on this one. That's what I'll be doing.

Ballmer wants your desktop. In software, and on the web. That makes sense. Buying Yahoo doesn't.

The consolidation will continue among the major players simply because that's the way we've made money on Wall Street for the last decade. Fund Managers are cheering. The markets will determine our future, not reality, or supply and demand.

Gold, Oil, Corn, Gas prices, Banks, and the Internet - Power, Fear, and Greed determining prices, with no benefit to the economy whatsoever.

While sometimes downsizing and /or consolidation is necessary to compete in the global marketplace, I think we've overdone it, and are now feeling the ripple effect throughout the US economy, and around the world.

Bad analogy? The timing couldn't be more perfect.

Memo to Yang : Buy AOL quick. I said it before right here. This could work ... for both companies, and we could continue to see some real, and much needed competition in the marketplace.

Brief Update: I returned late this evening to a few notes from ex-Microsoft and current Microsoft employees regarding my 'innovate from within' comment... and they're right. There are, in fact, many divisions of Microsoft that are innovating at nothing less than an incredible pace. My reference was pointed at overtaking Yahoo's home page Internet traffic (without spending gobs of money on content) and not to the numerous other divisions at Microsoft.

Staff edit Apr 7 PM