I don’t like this merger one bit because it is a waste of money and resources. I am probably the only one saying this. Here is why I think its a dud.
- Yahoo is a dud. Plain and simple Yahoo is a dud! They can’t seem to turn the company around. Microsoft is having a hard enough time trying to figure out what to do on the Internet and this is the blind leading the blind.
- Google is not the threat that Microsoft believes it is.
- Advertisement via the Google approach is not the solution of the future. Google carved out its niche and dominates it. You can’t replicate that.
- Integrating Yahoo and Microsoft is going to be a nightmare. You might as well integrate Microsoft and Apple because you are going to get the same results. Yahoo runs FreeBSD, PHP and a host of things that are NOT Microsoft.
- People, and customers are going to leave Yahoo because it is a Microsoft property.
I like Microsoft, I write oodles of software with .NET, but this dip in the Microsoft stock price does not give me confidence.
What I find surprising about this is that Microsoft believes it can beat itself. Office, and Window have become mainstays and I am sure Microsoft knows this. And I am sure that they know nobody can touch them. YET, Google has the same position in search and Microsoft believes by buying Yahoo Google can be beaten. That’s like saying Microsoft can be beaten by a company like Sun who bought OpenOffice. Yeah right, we saw that worked out very well for Sun (NOT!).
If I were Microsoft here is what I would have done with my 45 billion:
- Buy TheStreet.com, Epicurious.com, WebMD, Raincityguide.com, and so on.
See the pattern? These sites are essentially best of breed sites that focus on a specific topic. When people want to find out something they do it in two ways; use Google, or use a trusted source. Microsoft chose the route of battling Google, which is ultimately stupid since you can’t beat Google unless they believe Office and Windows can be beaten.
The future of advertisements will be advertisements from trusted targeted sources. Google works because Google created the market for the ads. If you try to copy it and think it is a problem where the solution is money then you are pretty stupid. If this is the new thinking from Microsoft then I have to admit I am depressed because Microsoft is loosing its ways.
If anything I wonder if Google is the company to invest in.
UPDATE: Here is an interesting take which asks the same question.