Maryam on Yahoo’s rejection of Microsoft

I just got back from my day in the Swiss Alps hanging out with Laurent Haug and friends and Maryam just asked me if I had heard that Yahoo rejected Microsoft’s offer. I answered that I did and then she asked me:

“Are they crazy?”

I said “probably, and arrogant too.” Then she wondered why they would do such a thing. I told her that I agreed with Philip Greenspun, who says that to reject this deal is lunacy. Since I know Yahoo’s board members aren’t lunatics, I figure there must be some other answer. I told Maryam “they are probably trying to see if the offer will go up.”

This is the first time since Pointcast rejected a buyout deal (that turned out would have been the right thing to do) that I don’t see a good outcome for Yahoo if they really do end up rejecting this offer.

I see lots of bloggers over on Techmeme are disagreeing with me, though. Hmmm, maybe I’m the lunatic!

33 thoughts on “Maryam on Yahoo’s rejection of Microsoft

  1. I was for a Microsoft takeover of Yahoo but not in a possible combination with News Corp. I think the Yahoo board will have a very tough next 2 years. They did stupid things to avoid the deal. It might have seemed very clever at the time. It was nothing more than a panic reaction. Yahoo can’t get where it wants to get on it’s own, but Google is not their friend whatever they think. I hope for their sake that my gut feeling is wrong.

  2. I was for a Microsoft takeover of Yahoo but not in a possible combination with News Corp. I think the Yahoo board will have a very tough next 2 years. They did stupid things to avoid the deal. It might have seemed very clever at the time. It was nothing more than a panic reaction. Yahoo can’t get where it wants to get on it’s own, but Google is not their friend whatever they think. I hope for their sake that my gut feeling is wrong.

  3. Yahoo! will do just fine without Microsoft. As a longtime Yahoo! user, I fear that Microsoft is buying out Yahoo! simply to eliminate the competition, not out of an interest to acquire Yahoo!’s technology, methods, presentation or even traffic.

    The longer this drags out and the more hostile it becomes, the more apparent Microsoft’s evil intention becomes.

  4. Yahoo! will do just fine without Microsoft. As a longtime Yahoo! user, I fear that Microsoft is buying out Yahoo! simply to eliminate the competition, not out of an interest to acquire Yahoo!’s technology, methods, presentation or even traffic.

    The longer this drags out and the more hostile it becomes, the more apparent Microsoft’s evil intention becomes.

  5. They aren’t crazy. They are sane. Future’s not so bright for Yahoo, but it’s even less under Microsoft with all the energy-sapping duplicational-merger political-warfare games, that are a sure result.

  6. They aren’t crazy. They are sane. Future’s not so bright for Yahoo, but it’s even less under Microsoft with all the energy-sapping duplicational-merger political-warfare games, that are a sure result.

  7. Scoble from high in the Swiss Alps: what’s your 20 thousand foot view on the technology integration challenges faced by Microsoft? Can you break it down for us – division by division?

    How would you recommend Microsoft handle global integration?

    Are there any Microsoft integrations in the past you’d point to – although not on this scale – that might provide a road map for how a merger might work?

    And let’s say Yahoo fights to the finish … ends up outsourcing search to Google. Then what for Yahoo? Crippling blow … or fire in the belly?

    For Microsoft – how many years do you think the desktop will be dominant? What should their play be in online advertising if Yahoo falls through?

    And is Blodget really smarter than Ballmer and Gates?

  8. Scoble from high in the Swiss Alps: what’s your 20 thousand foot view on the technology integration challenges faced by Microsoft? Can you break it down for us – division by division?

    How would you recommend Microsoft handle global integration?

    Are there any Microsoft integrations in the past you’d point to – although not on this scale – that might provide a road map for how a merger might work?

    And let’s say Yahoo fights to the finish … ends up outsourcing search to Google. Then what for Yahoo? Crippling blow … or fire in the belly?

    For Microsoft – how many years do you think the desktop will be dominant? What should their play be in online advertising if Yahoo falls through?

    And is Blodget really smarter than Ballmer and Gates?

  9. Yahoo!’s board may get sued no matter what they do. There will likely be a camp of users that want them to hold out for more (that’s one of their duties) and a camp upset if the deal tanks. I think that I am, like most people commenting, reacting on an emotional level without fully understanding the extremely complex financial nature of the transaction and the value to both companies. Having admitted my ignorance of the deep details, I’ll be bold to suggest that it’s never too late for MSFT to split up and that creating an online group based around Yahoo! would be great (after dropping all their “Live” stuff – and creating a core group responsible for operating systems and applications. Investors might like this model. I would.

  10. Yahoo!’s board may get sued no matter what they do. There will likely be a camp of users that want them to hold out for more (that’s one of their duties) and a camp upset if the deal tanks. I think that I am, like most people commenting, reacting on an emotional level without fully understanding the extremely complex financial nature of the transaction and the value to both companies. Having admitted my ignorance of the deep details, I’ll be bold to suggest that it’s never too late for MSFT to split up and that creating an online group based around Yahoo! would be great (after dropping all their “Live” stuff – and creating a core group responsible for operating systems and applications. Investors might like this model. I would.

  11. I’m guessing Ballmer said something about not giving up on buying Yahoo, hence the “too low” rejection…they figure MS will offer an even $50million relatively quickly.
    There’s the possibility that Google made a secret deal to buy them, but I’m not sure they would want to deal with the feds over potential antitrust.

  12. I’m guessing Ballmer said something about not giving up on buying Yahoo, hence the “too low” rejection…they figure MS will offer an even $50million relatively quickly.
    There’s the possibility that Google made a secret deal to buy them, but I’m not sure they would want to deal with the feds over potential antitrust.

  13. @4,

    Moving Yahoo to MS technologies is would be the height of foolishness from a tech standpoint. The lion’s share of Yahoo runs on FreeBSD or some form of *nix, which are both highly scalable.

    I know from personal experience that data centers running BSD or some form of *nix reqire fewer assets than a comparable MS solution, even taking into account virtualization. In addition, *BSD/*nix are far and away more stable, scalable, easier to port things from/to, and, in the end far more inexpensive since you don’t have the evil licensure to surmount.

    There are a whole host of pitfalls awaiting this move if it happens. I’m glad I’m not a techie for Yahoo. I know as a BSD/*nix systems administrator, I would be looking for other work. MS is fine and dandy on the desktop, but as a server, it’s half of what BSD is. If I ran my own company, I, too, would be all over the BSDs. They have no equal.

  14. @4,

    Moving Yahoo to MS technologies is would be the height of foolishness from a tech standpoint. The lion’s share of Yahoo runs on FreeBSD or some form of *nix, which are both highly scalable.

    I know from personal experience that data centers running BSD or some form of *nix reqire fewer assets than a comparable MS solution, even taking into account virtualization. In addition, *BSD/*nix are far and away more stable, scalable, easier to port things from/to, and, in the end far more inexpensive since you don’t have the evil licensure to surmount.

    There are a whole host of pitfalls awaiting this move if it happens. I’m glad I’m not a techie for Yahoo. I know as a BSD/*nix systems administrator, I would be looking for other work. MS is fine and dandy on the desktop, but as a server, it’s half of what BSD is. If I ran my own company, I, too, would be all over the BSDs. They have no equal.

  15. You can just wait for the first hedge funds to step in, forcing Microsoft to split up, as a split up Microsoft would have a larger value, than just one single company.

    Microsoft should need to focus on the areas where it excels instead of becoming a second grade web company. Microsoft has a lot of love on the desktop and in the enterprise, but in the web environment they’ve never been able to make any lasting impressions, because they just don’t get the dynamics and didn’t play good citizens on the web front.

    Should they buy Yahoo, I wouldn’t recommend it, because it would mean more fronts where they’ve got to put up a fight. Because not only Google would feel threatened, but also a lot of content providers…..

  16. You can just wait for the first hedge funds to step in, forcing Microsoft to split up, as a split up Microsoft would have a larger value, than just one single company.

    Microsoft should need to focus on the areas where it excels instead of becoming a second grade web company. Microsoft has a lot of love on the desktop and in the enterprise, but in the web environment they’ve never been able to make any lasting impressions, because they just don’t get the dynamics and didn’t play good citizens on the web front.

    Should they buy Yahoo, I wouldn’t recommend it, because it would mean more fronts where they’ve got to put up a fight. Because not only Google would feel threatened, but also a lot of content providers…..

  17. Looking to the short term, Yahoo stockholders should be upset if Yahoo’s goal is anything less than an attempt to get a higher bid. But looking to the long term, is Yahoo wrong to turn down Microsoft? I don’t think so.

    For more than ten years I’ve been arguing that Microsoft has expanded way beyond its core competencies and has become much too big – too big to be effective. (Of course I’ve also argued that Microsoft hasn’t been very good at its core competencies, but that’s an argument for another day.) While the tech industry has continued to grow and its value increase, Microsoft’s stock value has remained static. That is telling.

    Microsoft’s revenue, while impressive, isn’t about vibrant products its customers are excited about buying; it is about bloated and flawed products grudgingly bought by customers who are increasingly looking elsewhere. What does Yahoo bring to the party? Yet more distractions. It took Microsoft years to absorb HotMail – who believes that Microsoft’s customers or HotMail’s customers are better off today? Yeah, I thought so, me neither.

    For nearly ten years Microsoft has been rearranging the chairs on the deck of the Titanic (and I hear another reorganization is in the offing). Yahoo has its own problems and a merger with Microsoft isn’t likely to help either company. In the short run, as a Yahoo stockholder, I might be tempted to take the money and run. In the long run, I suspect I’d be better off letting Yahoo try to get its act back together alone or with a different partner. MicroHoo doesn’t smell like a winner to me.

  18. Looking to the short term, Yahoo stockholders should be upset if Yahoo’s goal is anything less than an attempt to get a higher bid. But looking to the long term, is Yahoo wrong to turn down Microsoft? I don’t think so.

    For more than ten years I’ve been arguing that Microsoft has expanded way beyond its core competencies and has become much too big – too big to be effective. (Of course I’ve also argued that Microsoft hasn’t been very good at its core competencies, but that’s an argument for another day.) While the tech industry has continued to grow and its value increase, Microsoft’s stock value has remained static. That is telling.

    Microsoft’s revenue, while impressive, isn’t about vibrant products its customers are excited about buying; it is about bloated and flawed products grudgingly bought by customers who are increasingly looking elsewhere. What does Yahoo bring to the party? Yet more distractions. It took Microsoft years to absorb HotMail – who believes that Microsoft’s customers or HotMail’s customers are better off today? Yeah, I thought so, me neither.

    For nearly ten years Microsoft has been rearranging the chairs on the deck of the Titanic (and I hear another reorganization is in the offing). Yahoo has its own problems and a merger with Microsoft isn’t likely to help either company. In the short run, as a Yahoo stockholder, I might be tempted to take the money and run. In the long run, I suspect I’d be better off letting Yahoo try to get its act back together alone or with a different partner. MicroHoo doesn’t smell like a winner to me.

  19. What I don’t get is what Microsoft is doing this. $40 billion for Yahoo and then all of the costs to switch Yahoo to Microsoft technologies? I mean, I assume Microsoft would pull a Hotmail and switch Yahoo to .NET technologies instead of LAMP.

    The cultures of the two companies are completely different, the technologies are completely different, and the markets are different.

    Why is Microsoft making this deal? They may think it helps them catch up to Google but I don’t think it does. Arguably Yahoo beats google with Flickr and Delicious. That’s it. Yahoo’s search is awful compared to Google, its ad network likewise, and so on. It certainly isn’t going to be added many new users.

    I just don’t get it.

  20. What I don’t get is what Microsoft is doing this. $40 billion for Yahoo and then all of the costs to switch Yahoo to Microsoft technologies? I mean, I assume Microsoft would pull a Hotmail and switch Yahoo to .NET technologies instead of LAMP.

    The cultures of the two companies are completely different, the technologies are completely different, and the markets are different.

    Why is Microsoft making this deal? They may think it helps them catch up to Google but I don’t think it does. Arguably Yahoo beats google with Flickr and Delicious. That’s it. Yahoo’s search is awful compared to Google, its ad network likewise, and so on. It certainly isn’t going to be added many new users.

    I just don’t get it.

  21. Yahoo has a lot of potential (existing assets, traffic and people). The MSFT hostile bid was maybe the wake up call they needed to realize that they need to be more aggressive and make some bolder moves if they want to catch up with Google. What Yahoo needs is a big layoff and focus on 5 or 6 strategic bets, hoping that one of them will end up creating an iPod moment for them. It will be interesting to see how it plays out.

  22. Yahoo has a lot of potential (existing assets, traffic and people). The MSFT hostile bid was maybe the wake up call they needed to realize that they need to be more aggressive and make some bolder moves if they want to catch up with Google. What Yahoo needs is a big layoff and focus on 5 or 6 strategic bets, hoping that one of them will end up creating an iPod moment for them. It will be interesting to see how it plays out.

  23. I won’t go into details, go over to MiniMSFT for that, some good points and debate. Or try MSFTExtremeMakeover for a good analysis. But I agree with Michael in post 1…bite size pieces. The sum of the parts is way greater than the whole.

  24. I won’t go into details, go over to MiniMSFT for that, some good points and debate. Or try MSFTExtremeMakeover for a good analysis. But I agree with Michael in post 1…bite size pieces. The sum of the parts is way greater than the whole.

  25. If you still have your MSFT stock then you lost money this past week

    I have been asking people who work on Live.com to link to Microsoft community blogs, but they never listened.

    What if they gave us Live.com/URL’s for blogging and shared the ad revenue?

  26. If you still have your MSFT stock then you lost money this past week

    I have been asking people who work on Live.com to link to Microsoft community blogs, but they never listened.

    What if they gave us Live.com/URL’s for blogging and shared the ad revenue?

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