but I can’t believe the DoJ will let the Yahoo!/MSFT hostile takeover proceed, it’s hugely anti-competitive.

Context is also the reason I think Yahoo is not the best choice for Microsoft. Yahoo does not improve context for Microsoft in any way. They are an admittedly large but tactical acquisition of traffic. Because they are tactical, they will be subject to the same attrition Google has been winning with for years.

Consider what might have been. The biggest, most contextually valuable, and strategic property Microsoft might have bid on is right in their own backyard.

Google may yet buy this company, and if they do, it leaves Microsoft way back in the pack strategically.

More here:

http://smoothspan.wordpress.com/2008/02/04/microsoft-yahoo-the-only-counter-google-combination-that-makes-sense-the-force-is-strong-in-another-one/

Best,

BW

Why?

Remember back in the ancient days when Microsoft bought hotmail. What did it buy? A domain name that people already used. Microsoft slowly converted all the non-windows technology at hotmail.com into windows stuff. Eventually, the hotmail.com domain redirected to live.com.

You want me to make an educated guess about what’s going to happen to the php/FreeBSD that yahoo has built? It will all be slowly upgraded to windows technology, and eventually, when people don’t notice (because they’ve stopped caring–in 2015 or so), it will redirect to something else.

In the meantime, they actually have all the yahoo traffic to milk for advertising (see: http://alexa.com/site/ds/top_500). Ultimately, they want to convert the yahoo brand into the Microsoft brand.

Yahoo won’t have the muscle to resist, because that’s what the 44 billion gets microsoft: the means to convert the top brand on the web today to Microsoft.
Same will happen to all of yahoo sub brands (flickr and company). Because Microsoft is brand focused, not brand diluted. (see http://www.businessweek.com/pdfs/2007/0732_globalbrands.pdf - Microsoft is #2 after Coca Cola, worldwide)

Microsoft is a marketing company that sells the products it develops and acquires by branding the products with the Microsoft logo and Good Name, and collects profit based essentially on the markup of the brand name. Granted, they have some outstanding products, but they would do a lot more poorly if they weren’t marketed and sold under the aegis of the Microsoft brand.

As far as developing the “social network”, it’s not in Microsoft’s best interest to do so. Social sites are generally very hard to control. There’s all sorts of unsavory contents that members post. Microsoft is not interested in having its premier business brand associated with teenage hooliganism and youtubish immaturities. Check out Obama Girl on youtube if you haven’t already–she’s great, and there’s a lot of socio-political value to her message–Yes Mr Dylan, the Times, they are A’changin–but you can hardly imagine this appearing on microsoft.com.

Remember this about microsoft: they will protect their brand. Yahoo was one of the tamer web properties out there, got a lot of traffic, and has a fairly good brand (when’s the last time Yahoo was involved in a public scandal?)

As far as google buying facebook. I don’t see it. I think Google buying Sun Microsystems would make more sense (remember MySQL) and they probably could get it for $16 billion (on today’s JAVA market cap $13.85B). With Java the language, mySQL, OpenSolaris, and great hardware/software engineers, SMI would be a great value to Google. I think it would also be really good for Sun because Google management would probably clean house in Sun’s management.

As far as Al’s comment: indeed, Yahoo is fubared long term. Taking Microsoft’s money is a good escape strategy.

On the “Search is not going to be the same kind of advertising revenue generator in the future” thing, I agree. There are much better tools for affinity linkages, such as feeds and–dare I say it–Social networks. Although, to be honest, when I’m searching for something on the web, and I’m feeling lost in a sea of millions of results, and I’m scanning every word on the page in the hope of finding something remotely like what I think I’m looking for, I am much more likely to linger upon some semi-relevant advertising than if I’m at my friend Chihiro’s facebook page. Because there, there’s actual content that I want, and I completely ignore the ads. Completely. Because there’s very compelling, personal content that satisfies my curiosity. (Let’s be honest: which is better, to find out your high school sweetheart is struggling with her 3 year old son Jason or the latest ad for a HP laptop?– I rest my case.)

More and more the internet is becoming tightly woven into our lives. Less and less people will tolerate distractive advertising. You want advertising to be present when you and your spouse exchange sweet nothings on the sofa, a glass of good wine in hand? As the internet allows more and more intimate connection between people, the places that will attract this interaction best will feel cozy, warm, like your friend’s living room (livingroom.com is squattered btw) or the local pub where all your friends hang out, regardless of whether they’re feeling gloomy or cheery. This intimacy, this closeness between people is good. I wish all the people on this planet felt that they are part of a great big family, rather than pointing rifle barrels or rusty machetes at each other, and if this pseudo-intimacy social sites afford us can help us get along better and understand each other’s pain and struggles, then the internet would have been worth it. The thing is, I don’t see advertising as a facilitator of such social sites. Rather, it would hinder, because it depersonalizes the experience.

Look at wikipedia. Isn’t it amazing that it does not display ads, and for all its faults, has managed to change the way people think of the internet and about collaboration in general?

Oh my look at the time… I’ll sign off now.

Language like “conversion attribution” indicates to me a complete misunderstanding of the ways things are moving, that is language of the previous era.

Goog buying Facebook sorry wrong DNA, body would reject that tissue surely.

M$ buying yhoo will probably strengthen Goog’s hand (certainly inthe short term). It will probably destroy more than it creates, not to mention the short term carnage for yhoo services.

But then yhoo is fsck’d anyhow..

regards
Al

regards
Al