Learning about the MSFT - Yahoo! bid makes me ill.
The bottom line: Yahoo will get sold to Microsoft.
Why my confidence? Because Microsoft is paying more than anyone else would be willing to pay for Yahoo. The bid is $44.6 billion, or $31 a share, in cash and stock. Thursday, Yahoo closed at $19.18, a market value of $25.6 billion. If you take out the value of Yahoo’s holdings in other public companies—which the company estimates to be worth $14 billion or $10 a share—that means that Microsoft is offering to pay more than double the value of Yahoo’s existing business.
This bid makes sense for Microsoft from the point of view of strategic survival. Its search and Internet operations are not getting traction. By far, its best option is to combine with Yahoo to create the dominant No. 2 in online advertising and Internet search. But even combining two big players probably doesn’t pan out from a pure dollars and cents point of view.
You know- I started using this cool little site Flickr - then it got sold to Yahoo! (bad enough) now it looks like it will be sold to MSFT. It really is a bit much for me to take.
I really don't like MSFT - I had an IBM PC and could never "bond with it" or get it to work well for me - I was glad when I lost it. The next machine I got in college was a mac and I have been happy ever since. I don't use their online tools AT all.
The thing that is so sad about all this is that Yahoo! for a while was the darling of the Valley - they bought the coolest web 2.0 startups. It felt like we were all cheering them on and then 'nothing happened' either to the products or their over all reality. My sense it that heart of the issue is that Yahoo! is an 'older company' and has the patterns of that kind of world. My sense is that It is bloated with bureaucracy and fiefdoms and the old way of doing things.
MSFT is even worse. At dinner last night we were talking about how they failed to 'do the right thing with IE' complying with web standards because their own products - Word, Excel etc. when you say 'make HTML' make bad HTML that renders ok in IE but not in other browsers. So being web standards compliant well isn't good for them. If I was their boss I would just say go with the web standards - get that world of geeks to start trusting you and liking you that you don't make their world more difficult by having to make sure every thing they make renders on your browser with extensive tweeks to make it work.
That inability to play nice in the web world is not really good for the web of for people. I thought Ray Ozy was supposed to fix all this?
Putting two companies together - both with 'older' cultures does not give you hip new web that people want to use. It just means they will fight between them in ways that are likely not productive for either and don't get you good web tools/products that get them what they think the need which is Eyeballs. You know maybe they should think about their 'relationships' with their customer more. I had a relationship with Flickr (where they messed up was 'forcing' me to integrate that account with my YahooID) - I have one with other companies I use and am faithful to - 37Signals, WordPress, Twitter.
Having just 'bashed' MSFT. I must restate publicly that the people from MSFT that I know personally and have been working in the identity space are good folks and that MSFT has been a great contributor to the work of the identity community. The remarks about MSFT are not directed at them or their efforts around identity at all.