Did Microsoft really think before making its Yahoo play?

Did Microsoft really think before making its Yahoo play?

Summary: Instead of spending $45 billion on Yahoo, wouldn't Microsoft be better served spending that money with IBM?


THINK sign with Thomas Watson Sr. from IBMEveryone and his Aunt Fannie has now weighed in on the Microsoft-Yahoo deal.

But I'm wondering if they're all missing the point. Is it possible Microsoft has called on the wrong company?

We all know what this is about, web search. Buying Yahoo doesn't solve the problem. It's a poor number two to Google in search, and a turnaround is needed for it to become a challenger.

Rather than looking at this as a game of buying market share, perhaps Microsoft should examine what this really is -- a system integration challenge.

Google doesn't just win because of its search algorithms. Search for this story in Google News today, or a week from now, and you'll know that's true.

Google wins because it delivers instant answers for less than its rivals. Google wins because it has dark fiber, low-cost server farms, parallel processing, and mirrored databases.

These aren't just assets. They're systems it took years, and many breakthroughs, to develop.

Catching up with all that will be an enormous challenge. Overtaking it may be an even bigger challenge.

So rather than buying a company which has tried to do that and failed, why not consider buying the firm best-equipped to take on that challenge?

Why not buy a company with its own worldwide network, with a ton more open source mojo than Yahoo, and with many of the world's best programmers on-staff?

Or if you can't buy them, why not just hire them? Sign a master contract to share costs, share revenue, and go to market together?

Instead of spending $45 billion on Yahoo, wouldn't Microsoft be better served spending that money with IBM?

Think about it. Google is about to do to Microsoft what Microsoft did to IBM 20 years ago, take the future by controlling what underlies that future. Back then it was PC software. Today it's Internet search and Web ad service.

Since being overtaken IBM has remade itself. It's like a drunk who's been to AA, only what it kicked was power, not alcohol. IBM is now, on the whole, content to stay in the background, behind its customer, but it's very, very good at that.

You'll pay big for what IBM does, even if IBM uses open source, but you'll get what you want.

Microsoft has something it wants, a search system that can go toe-to-toe with Google's. It has shown it is ready to spend big to get it.

I don't think Yahoo is up to that challenge. But I think IBM might be.

Topics: Social Enterprise, Browser, Google, IBM, Microsoft, Open Source

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.


Log in or register to join the discussion
  • Dinosaurs don't react to their environment.

    They go extinct.
    • Not always

      GE is still around. IBM itself is nearly 100 years old. HP got its new, vaunted leader from NCR, which contributed Thomas Watson Sr. (pictured) to IBM in 1915.

      It is difficult for companies to continue through several eras, but it's not impossible. I just suspect this Yahoo deal may be one of those 1+1=1 deals.
      • I think the point frgough was making was that MSFT WON'T change

        Both GE and IBM were able to change with the times and stay around - even if, as you say, IBM needed a good twelve-step program first. :D M$ acts like most big companies do, all bloated and arrogant and confident that the tracks they've followed for decades now will never wear through, even as everyone else can clearly see they more assuredly have.
  • RE: Did Microsoft really think before making its Yahoo play?

    I don't see this deal being allowed.
    If it was just a big company taking over Yahoo, no problem.
    Microsoft on the other hand has so much power in the in computing. Having it as a power in search is a lot like having their search be part of the operating system.
    Taking Yahoo out of the equation takes away true alternative services. Something else will come along at some time to rival google, possibly even a revamped Yahoo, but we don't need a $2,000 2010 Win VistaB OfficePro MediaCenter MsHoo bundle.
    zdnet reader
  • RE: Did Microsoft really think before making its Yahoo play?

    Do they ever really think? Did they think before releasing Vista, which I got on my new computer and then took the plunge into linux (well worth the plunge). Did they think about this new server to come out? I suppose they thought about it, but I don't believe it's going to end the heavy use of linux servers, which have proven to be more secure over the years. Putting more money--or "pouring" more money into Vista--would have made more sense than buying Yahoo. If you are out there and having trouble with Vista try Debian, Ubuntu, Suse or a host of other varieties of Linux. Ubuntu is said to be the friendliest to use, but I've had very little trouble learning Debian. There are loads of great downloadable software that one doesn't have to pay hundreds of dollars for!

    Yes, Microsoft doesn't really think. They don't believe that people will actually go over to another OS. They have great need for a new manager that will put the money where it is need. Operating systems and servers first...then contemplate yahoo.
  • RE: Did+Microsoft+really+think+before+making+its+Yahoo+play%3F

    The trouble is that Google already exists. Do we really need or want two such companies. And is there sufficient electric supply for another lot of server farms?