Saturday, May 3, 2008

Microsoft pulls the plug on Yahoo!

In a style that has become all too familiar, Steve Ballmer 'dropped the bomb' on a Saturday.

Microsoft is NOT pursuing the acquisition of Yahoo.

Many had speculated (including me) that this was a 'done deal' from the start, particularly because when Ballmer goes for something, he likes to get it.

On the other hand, in one of our posts that crossed the 'Techmeme wire' early in the game, I humbly suggested that Microsoft (or Yahoo) think about AOL instead, noting "It's a bad deal for Microsoft".

In the meantime, Yang and company weren't sitting idling by, adopting one 'poison pill' after another, and, in what appeared to be an extraordinary motivational push, released one new product (or service) after another ... during the past few weeks.

Who wins and who loses.

On Monday, Yahoo stockholders will lose. Whether or not the stock tanks, it still remains to be seen as to whether or not it will stabilize and recover. The company is solid. They've introduced some relevant new initiatives, and yes, they still are the most visited page on the Internet.

The employees that 'kept on goin' with Yahoo will win. Especially, the really excited ones.
Don't count this company out.
Their search may need (A LOT) of work, but there's a lot of ways to profit in their position.

Microsoft wins? In my humble opinion, the price was extremely high. There's a lot of deals that can be done with a small percentage of what they were offering for Yahoo... and no doubt, they will.

Google wins big (again). Whether or not they do the ad deal with Yahoo, Google still owns a huge portion of advertising revenue on the Internet. Even if a company manages to come up with a viable alternative to adsense, Google remains forward-looking and is already testing the waters in the TV, Radio, and Cellphone advertising markets.

So, what's the deal with Google?
They 'won' when they lost the wireless spectrum auction.
They're winning here.

Most of the ex-Googlers love Google. It's the corporate culture at the Plex. It's the way they treat their staff, employees and contractors. It's different, and it works extremely well in this decade.

As companies adopted Japanese business cultures in the 70's and 80's (as Japan's products were rapidly overtaking American manufacturing companies), maybe it's time for the social scientists at Microsoft and Yahoo to be studying Google's culture more than anything else?.

Update: Yahoo has issued a response to Microsoft's letter here.

Update 2: Other voices: We just added a variety of other reports and opinions to our Google shared reader feed (at right) to make it easy for you to sift through some of the comments over the past few hours since the Microsoft - Yahoo exchange. In addition, Robert Scoble is posting the conversations and comments to Friendfeed here.

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