A successful bid for Yahoo! would be death knell for Microsoft

A successful bid for Yahoo! would be death knell for Microsoft

Summary: Microsoft has weathered two significant challenges to its world wide monopoly. It is facing the third challenge right now and it is not advertising revenue.

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Microsoft has weathered two significant challenges to its world wide monopoly. It is facing the third challenge right now and it is not advertising revenue. The first challenge was the Internet. Microsoft almost missed the boat there but thanks to Bill Gate's mom he was introduced to a local ISP and immediately grasped that the Internet changed everything. He wrote a famous memo and turned the MSFT juggernaut. It is still too bad that he crushed Netscape in process, that was uncalled for. But, by introducing a TCP/IP stack into Windows 95 Microsoft ensured the rapid growth of the Internet and their own place as the platform of choice for accessing the marvels of the web.

The next challange to Microsoft was security. And, another memo outlined their response and what has now proven to be a successful strategy. Microsoft has weathered the vulnerability storm. Thanks for to better patch management than to better software practices, but that is coming too.

I find it ironic that Bill Gates has even identified the next major challenge to Microsoft's world domination. He recognized back in 2005 that web based applications were the next "sea change". But, because he had stepped down from day to day operations, and this year is retiring completely, I believe Microsoft has failed to act effectively to address this final challenge.

Maybe it is my years fighting "ad supported software" otherwise know as adware, scumware, shlockware, spyware, that makes me suspect of the "ad economy". Yes, Google makes obscene levels of money over a few simple but powerful applications. But just because there is money to be made does Microsoft have to be in that space? Was MSFT buying up gold and oil reserves the last few years? Are they getting into bulk shipping? Were they buying New Zealand dollars? There are tons of ways to make money if you are sitting on $19 billion. Ways that have real returns for your stake holders.

This grab for Yahoo! will kill Microsoft if it goes through. The guys at Yahoo! are smarter at generating ad revenue than the guys at MSFT but they are still losing out to Google. Microsoft should open their eyes to the real challenge facing them: software as a service. Chasing after ad dollars is a red herring.

If this deal goes through you will be able to mark this single event as the beginning of the end of the biggest tech giant ever.

Topics: Microsoft, Browser, Social Enterprise

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15 comments
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  • I think you may be missing the point

    I think you may be missing the point. MSFT wants the yahoo space as a platform for their entry into the "software as a service" arena. I really think the Ad revenue is a "red herring".
    RichPletcher@...
    • You are right. This isn't about ad $$$.

      Or search results. It's about Web 2.0, social networking and OSS. But mostly Web 2.0
      bjbrock
    • Regardless...it will fail!!

      Because too many know better...and will leave Yahoo if M$ takes over. I know I will. I will sign up for gmail tomorrow if this goes through.
      Techboy_z
      • Gmail rocks

        much more reliable than Yahoo! and you do not even notice the text ads.
        karen@...
        • Text ads ??? What text ads??

          Seriously, I have 2 GMail accounts since GMail was created and I haven't notice any ads. Also, GMail's spam blocker is very accurate and so far NONE of my real email has ended up in the Junk box.
          wackoae
  • RE: A successful bid for Yahoo! would be death knell for Microsoft

    i agree with the 2 above me
    blahblahblahblah@...
  • RE: A successful bid for Yahoo! would be death knell for Microsoft

    I don't agree with your forcast... Microsoft has been crippled by its reliance on its own products. Yahoo is run off of BSD, and when Microsoft shifts its web sites away from Windows it's a whole new ball game.
    akaltman@...
    • Ha!

      Just like Hotmail was Linux based and MSFT moved the platform over time. They would try the same with Yahoo!
      karen@...
  • Email google

    Email marias@google.com saying that google needs to bid for yahoo!
    DeSalvionjr
    • Yes, Google should bid for Yahoo!

      Microsoft would graciously let Google win and take advantage of that blunder. Maybe that is the strategy.
      Anton Philidor
  • Microsoft does not make mistakes...

    Microsoft will embrace Yahoo and soon thereafter extinguish everything that held Yahoo back; namely a reliance on BSD operating systems and a weakness for Open Source methods. Once Microsoft has control of this company, Windows Server 2008 and Vista will become the platforms of Yahoo and the entire Internet will be saved from Google. The completion of this deal is not the end of Microsoft, it is the beginning of the Web 3.0 served with a side of Vista.
    Mike Cox
    • Drum roll.........

      Keep 'em coming Mike.
      D T Schmitz
    • Are you serious?

      Your sarcasm is pretty subtle.
      karen@...
  • RE: A successful bid for Yahoo! would be death knell for Microsoft

    Absolutely. MSFT is making a big gamble with the war
    chest and knowing how little innovation ever came out
    of Redmond (hence the purchase of Yahoo!) this is it
    for MSFT. Outside of OS and Office products, what
    does MSFT make money at? Zune, Xbox and Live?
    Hardly. Xbox continues to lose billions for MSFT. So
    many initiatives, so little to show for it.

    When will people realize that MSFT is wearing no
    clothes?
    Blad_Rnr
  • RE: A successful bid for Yahoo! would be death knell for Microsoft

    That is exectly what I thought when I first read the story. Good call.
    Fnetter