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« No, Mecca is NOT the center of the world!Blogging, as a tool for change »

Microsoft - Yahoo deal, my thoughts


    • Currently 4.7/5 Stars.
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    Rated 4.7/5 stars (97 votes cast)

    I guess the whole world is buzzing with news about the two. many hailing this as the greatest thing ever while many more have voiced their anger, frustrations and fears of the deal going through.

    Being the skeptic that I am, forces me to take a look at the whole situation while trying to evaluate what it means to the companies, and what it means to the rest of the world

    To start, I think this very proposition is going to set in motion a huge shock-wave throughout the Internet and the world. As apparently, the folks at Microsoft have finally matured enough to the level where they can attempt such a large scale assault on one of the largest Internet bodies, the Goliath, Yahoo. Which was until Google took it's place the Internet Giant. With it's services spanning great favorites like Flickr, their amazing online gaming communities and not to forget groups.

    So this deal will help Microsoft get the foot in the door on an industry that Microsoft has been suffering to get to for many years.

    This hostile take over is going to serve many objectives and I think Steve Ballmer (Microsoft CEO) Knows this and aims for it!

    If you read his mail to the board of Yahoo, you will notice very interesting arguments. The first, Ballmer is scolding the poor performance of the board. This is amazing, to consider that some other manager is giving you the "F" on your report card. It's just fascinating on it' own. But this is not just any external boss! This is the boss of Microsoft, in other words the whole world is listening.

    He hits two home-runs in his mail by drawing two wedges between the board and the rest of Yahoo employees, and second between the board and the shareholders;
    a) The first wedge as he says that Microsoft will retain the employees of Yahoo (Compare that with Yahoo's attempts to lay off thousands as reported in the news over the past few months).
    Which results in the employees losing faith in their board, and would probably vote with the sell in favor of Microsoft if it was a democracy!
    b) The second one as he boasts the financial performance of Microsoft compared to the plunging of Yahoo as a stock, and as a company. Which makes the shareholders lose faith in their board.

    Regardless of the decision of the board the message is clear. There will be blood. There will be competition, and this simple maneuver on Microsoft's side is a clear signal that it will not allow Google to buy an undervalued Yahoo for pennies on the dollar,  (Which means Google's supreme dominance on the Internet). Rest assured Google would have done it!  (I wonder if people would object then!)

    I'm sick of how naive some people are when it comes to Google and their intentions. They are clear, they are monopolistic and if it wasn't for competition we will soon be paying for search queries in a world with no competition. That's Capitalism, you have a revenue source MILK IT!

    In my opinion it's very important to keep the competitive pressure on Google and Microsoft, this competition will ensure the low cost of Internet that we enjoy at present.

    Few months ago, in a kind-of-similar maneuver, Microsoft placed a premium price on Facebook, after rumors that Google might buy them of. The 500 Million investments placed the official value of the company at 15 Billion dollars making it a harder target for Google to acquire as it did with Youtube!

    Remember Youtube? At 1.6billion, while Facebook i valued at 10 times that amount? It doesn't make sense. And I'm sure Microsoft don't just throw their money away like that. But it was necessary!

    Had Microsoft paid 500M for 5% of Youtube making it worth 10 times as much, Google, wouldn't have probably bought it! It's just too large, and too expensive. Blocking Google with a only 500M would have been worth it.

    My thoughts are mixed on this, I don't think it's the right step for Microsoft to go ahead and buy Yahoo.. As a user, this would be great news for me. Who cares if Flickr is now owned by Microsoft as long as it's free and users all the technologies I'm used to.  My email, instant message, and just about everything else will continue to work just fine! Maybe even have some amazing extra features.

    The biggest beneficiary of this take-over is going to be Yahoo. The company is going down, and there's no way it can be saved without chopping off that idiotic board that allowed all of this to happen under their nose. Giving it value once again, give the shareholders trust in the share and something worth their while and give the workers of Yahoo the security and stability to continue to innovate!

    As for the biggest loser? It will be Microsoft stock holders, as Ballmer blows off those billions which means, no more dividends. But who cares about dividends if your stock jumps from $30 to $90? But don't hold your breath!

    I think, this deal is going to go through with or without the blessings of the Yahoo board, they know their days are numbered and I think they're trying to stall to get a better deal. But it ain't gonna get any better than this.

    If the board rejects all the deals, Microsoft is going to go to the stock holders who are going to gladly dump their struggling stock for Microsoft Cash and by the time Microsoft has 12.5% of all the Yahoo stocks, it will control the board anyway!

    Another goal for this deal is for Microsoft to prepare itself for the upcoming recession. Many analysts think that this is coming, it's almost on top of us. And Microsoft's way of standing through this second bubble burst is by changing it's cash into assets like Yahoo. It' Microsoft's way of entrenching itself for the upcoming change in economy, and lets face it, those 40 Billion don't mean as much as they used to mean 2 years ago.

    Lets just wait and see, but all of this is going to keep Google in check!  Which is the best thing about this whole deal because quite simply, "I don't trust em"

    Other Memories Documented on February 11
    « No, Mecca is NOT the center of the world!Blogging, as a tool for change »

    Memories....

    Ineteresting thoughts...The amount of money that microsoft is willing to pay is huge, this suggests that they have lots and lots of extra money, and this extra money is going to buy another company, but, what about R&D spending? Are they pumping cash at that venue?

    I know that microsoft is buying customers and market share in their move, but still, I keep wondering why don't they push that money into R&D?
    As far as I know, Microsoft pumps more cash in R&D than everyone else on the map (more than Intel, IBM, Motorola, Apple, Google, Sony, Toshiba ...etc) combined.

    If anything, some people are arguing that Microsoft is over spending on their R&D! But I don't think there is such a thing as overspending on R&D

    I think that what's going on is Microsoft trying to entrench itself for the upcoming depression in economy, where cash is not going to mean much, but assets (like Yahoo) will allow it to emerge victorious on the other end
    • #3
    • KJ
    • Windows Firefox Browser
    • Said
    • On: 2/11/2008 6:35:36 AM
    Qu, if Microsoft is indeed overspending in their R&D then they need other R&D people.
    Totally KJ... totally!
    this deal is not going to happen. Aside from many news stories of Yahoo talking to Google for a possible "alliance" and AOL for a restart of merger talks, Yahoo offers more than what MSFT offers and is better at it. Alone, Yahoo's service are generating profits. However, MSFT has been struggling to generate profits from its online services. most of their profits come from selling Office software and windows OS. if you look back at MSFT recent efforts to diversify their product line, they have been losing money right and left. Their X-Box is losing to the freakin' Wii, their online services , such as gaming, MSN, and email are distant second or third to Those of Yahoo and Google. and with the surge of open source, in which Google has a big role, even their office software is losing market share however slowly. In addition, the doubling of Apple's market share of personal computers is presenting a big threat than ever to MSFT. Therefore, for MSFT to think that it could take advantage of an ailing Yahoo is a big reason for everybody, Yahoo's employees included, to think it is The Windows' Devil all over again!
    Garfan
    We're looking at a deal that is designed in a way that even if it fails, it still blocks Google from buying Yahoo. In fact, just by making this offer, yahoo has benefited greatly.
    I'm not sure which planet you came from, but Yahoo's employees are relieved, they got a new lease on life. Now they're "suddenly" worth more, and talks of layoffs are ... no more!
    It took an act of hostile threatening for the executives in Yahoo's board to get off their lazy asses and start finding deals to keep the company afloat! Well, it's about time! At least NOW they're doing something. In the end, some form of deal will happen. This is my prediction, this deal may be in the form of hostile buy off of the stock (which no one can do anything about)

    This is not a "bash Microsoft"/"Praise Microsoft" festival here. So lets not change it to that. However, a bunch of things to point out ...

    Hotmail/live still has the largest base of users of all 3 email systems. Tied into the also top IM of all three with Google Talk struggling at distant light years behind position. (maybe it's catching up, but from the looks of it, it's losing, and might end up buying Skype to help support it. I wouldn't be surprised if Microsoft placed a bit on Skype too, although, Anti-trust would be very high on their heels because they do have competing technologies)
    Xbox is winning against it's target (Sony's PS3) Wii is making better than the two. But Xbox is doing way better than they ever thought it ever will.
    Google Must be challenged, even if it was at a loss from Microsoft, Just as AOL was challenged when they went on a shopping spree. We would have been paying $60 for dial up access if it wasn't for .. yes, the crappy, losing, MSN.

    Most of the people don't even know what Open source is, or even care. It's not like my grand mother is going to download it and update the sources with her own custom add ons. Open source does not mean FREE. And trust me, one day even Microsoft is going to be forced to go Open source. Would anyone care? Yeah, people who want to steal code will. But would it make any difference? No!
    Actually I think Microsoft already opened it's source to partners but not to the public

    If you had a little bit of a longer memory of the computer world, and look back you would trust certain services, and companies differently. Quite frankly, Microsoft still has my trust... I can't say the same about many others
    You too can have your Memories Documented

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