This is the first time I’ve seen Yahoo’s Live video streaming service demonstrated. Here’s a separate video of the first part of the presentation, which demonstrates a mini bar. They showed it off at the Adobe Engage event yesterday. Very cool, I ask why they haven’t done a cell phone streaming service, like Qik.com, and they say they want to be a platform. They also say that Flickr video is still being worked on by the Flickr team and will come separate from this effort. Nice API that’s used in a neat mapping mashup.
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!
I’m surprised that even Kara Swisher has missed this. The bloggers are going nuts, once again, over the email that a Google lawyer sent to Microsoft regarding Microsoft’s proposed purchase of Yahoo.
Here’s what’s really going on:
1. Google doesn’t mind this deal going through at all. Google knows they will be able to outrun a “Microhoo.” Why do they know that? Because they’ve been able to outrun them both separately. As I said on Channel 5 news on Friday night: put two turkeys together and you don’t get an eagle.
2. Google stands to gain HUGE by slowing down this deal. Every month longer that this deal takes is tens of millions in Google’s pockets. Why? Well, the real race today isn’t for search. Isn’t for email. Isn’t for IM. It’s for ownership of your mobile phone. I met the guy who runs China’s telecom last week in Davos. He’s seeing six million new people get a cell phone in China every month. So, every month that Microsoft and Yahoo will be stuck in some courtroom arguing out why this is a good deal means money in the bank for Google as they close mobile phone deal after mobile phone deal.
3. Email is not where the money is. Google knows this. So, who cares that Microsoft and Yahoo have a monopoly there? There’s only one way to make money with the 600 million who are on either Microsoft’s Hotmail or Yahoo’s email: get them to join other services where there ARE ways to make money. Danny Sullivan told me that this deal is all about search. He’s right. But you gotta be able to get those 600 million people to not just use your email, but come over and use your search. Google is trying to slow down these teams from doing that. But Google knows that even if Microsoft and Yahoo join email and do a pretty decent job of integrating search into there that Google will still see more growth in both email and search than Microsoft and Yahoo together will see. Why? Have you compared Google’s offerings to the others? I have (I am a Hotmail user). Even though I am locked into Hotmail cause my email address is all over the Web I’d rather be on Gmail and Google’s offerings are better integrated and better designed.
4. IM is harder to monetize than email is. Do we really think Google is concerned about either email or IM? If they were they’d be pouring lots of resources into Gmail and Google Talk. Hint: Google isn’t doing that. Why not? Because they aren’t taking their eye off the mobile ball. They are hoping that everyone else does, though, by sending this note. It sure did work, too. Damn the bloggers all took the bait and either called Google arrogant or hypocritical or annoying. Google is all of those things here, for sure, but they are damn smart and are doing this for their own purposes.
Now, we can argue about whether this deal is good or not, or whether it’ll work out for Microsoft or not, but people, don’t take your eye off of what Google is really up to here. Google is having fun by causing Microsoft to react, not to mention that if its little note is taken seriously this deal will be slowed down by six months or more while government regulators look it over. Even in the best of situations it’s going to take a year for these two huge companies to integrate and figure out how to work with each other. So, every month that this gets delayed is gold in Google’s pockets.
But what I find interesting is that Bill Gates is out and now Ray Ozzie is roaring. Microsoft has been so damn boring since I left in June of 2006. This shoots the boring in the head.
Why is “Microhoo” not boring?
No, not my pet service Flickr. But, damn, Gates could have bought that for $40 million. Instead Ray and Kevin had to spend billions. Wow. Nah, what makes Yahoo/Microsoft interesting is the email audience. That’s another 300 million people to add to Hotmail’s audience of close to the same. Yahoo has a ton of interesting Web properties that are far more interesting than anything Microsoft has done lately. Groups. Finance. Upcoming. Etc.
This gets Microsoft back into the Web game in a big way and puts a defense around Microsoft’s Office cash-generating-machine. I bet that some of Yahoo’s smartest engineers get moved over to the Office team to help build an online Office that’ll keep Google’s docs and spreadsheets from getting major marketshare inroads.
It’s the fear that Google’s Docs and Spreadsheets might someday take marketshare away from Office that I think was driving this deal.
Sad thing? I still own Microsoft stock, which went down today on the news. But I think that long-term this is a good deal for Microsoft’s shareholders too. With one caveat: Microsoft and Yahoo employees need to work together to create value, not destroy it. That’s going to be pretty tough since the cultures of the two companies aren’t a total fit.
Both companies also have lots of fat that can be cut, so it’ll be interesting to see whether Microsoft keeps the fat around (on both sides, as they have done so far) or if they cut back to make both companies together leaner and meaner.
Microsoft has a world-class advertising sales team and this gives that team a ton of new inventory to sell.
Anyway, this is what happens when a blogger tries to get some sleep: the entire world changes and he misses the boat. 🙂
Kara Swisher is angling for seats at Jerry Yang’s keynote at CES in January. Just kidding, I’m sure she’ll get iin.
Last year the guy with the biggest news at CES wasn’t even AT CES. Heh. Steve Jobs is brilliant.
Unfortunately for him this year MacWorld and CES aren’t at the same time, so that means that CES’s keynotes will actually get discussed on blogs.
So, who’ll have the best keynote? Jerry Yang? Or General Motors’ CES keynoter, CEO Rick Wagener? I’m thinking General Motors might just be more interesting. Why? Did you know that BMW is charging $400 for a freaking iPod cable connector that cost them a dollar or two to make?
GM can totally change that for millions of its customers.
I want a car with a hard drive built in that gets music off of my home network while parked in my garage (which already has wifi).
Hope GM does it.
Oh, and if you’re going to CES, make sure you signup for and come to the Seagate/PodTech BlogHaus. It WILL sell out this year and those who signup on Upcoming.org will get first dibs on tickets. We’ll have lots of news of our own there.
A few months back I wrote a Fast Company column about Yahoo’s moves into the social software space. Sure is in contrast to Ballmer’s approach, no? Today we see that they are making more moves in search too. I noted that back then I noticed that Yahoo’s execs were far more upbeat than I’d ever seen them. It’s time to compare search engines again. Has anyone done a good comparison of the moves made?
Steve Rubel reports that Yahoo missed its estimates and that’s sending advertising-based stocks down sharply in after-hours trading (MSFT is down a bit too). The market will be interesting to watch tomorrow, that’s for sure.