Microsoft + Yahoo! = ???
The big news today is Microsoft’s $44.6 billion bid for Yahoo!. This comes with little surprise, as many were expecting Yahoo! to get acquired sometime this year. They were a dying company with little innovation, and didn’t have what it took to go up against Google. Microsoft, on the other hand, is a company equally as big as Google, if not bigger. When it comes to computers, Microsoft is the obvious market leader. However, Microsoft wants to get into the ad business. They want to take down Google’s monopoly on online ad sales. They’ve tried by placing a $240 million stake in Facebook – the biggest online social network. They have won over other big social networking sites like Digg, to use their ad system instead of Google’s. Now with Microsoft’s attempt to acquire Yahoo!, they are going head-to-head with the king of the Internet – Google.
The question in people’s minds this morning is, “What will happen to Flickr and Del.icio.us and all the Web 2.0 sites that Yahoo acquired?”. “Will Microsoft ruin them?” “Will they create a Microsoft Flickr 2008 Ultimate Pro edition?” I really believe that Microsoft and Yahoo! are very similar in this respect. When Yahoo! acquired Flickr, there was already an established user-base. Yahoo! didn’t drastically change anything about Flickr. And I don’t believe Microsoft will either.
Think of it. Now that Microsoft owns Flickr, do you really think they will abandon their Windows Live Photo Gallery service or Windows Live Spaces? No. While Microsoft will own all these Web 2.0 services, I don’t think Microsoft actually knows what to do with them. Yahoo! was a previous competitor to Microsoft, and they have too many overlapping product lines.
What will be interesting however, is how other companies respond. Apple, has partnered with Yahoo! to have push email to iPhones through yahoo.com email addresses. Will Microsoft still continue to allow that? And on the iPhone, people have the option between choosing Google or Yahoo search. Note that there is no Windows Live option. I wonder how soon Yahoo will disappear off that list as well. And as of 2007, Yahoo was the most popular free email service – beating both Gmail and Windows Live mail. Will Microsoft change the @yahoo.com emails to @live.com? Or will they just continue to use the Yahoo! brand?
While this is undoubtedly one of the biggest tech acquisitions in the past year, I don’t think much will change for end-users. While Microsoft will own Yahoo! and all their assets, I don’t think there will be much change. Yahoo.com will continue to exist, but it will just have a different owner. This is just Microsoft’s sad (yet expensive) attempt at competing with Google. I don’t see it going anywhere. Let’s see how Google responds.
In other news, Google’s stock is down $50 today.
