The deal between Microsoft and Yahoo is an interesting one. Why Microsoft is interested in Yahoo? What are the strengths of Yahoo that interest Microsoft?
Yahoo
Yahoo is great for online content and innovation. They have heaps of sites like Y! Sports, Y! Movies that generates alot of online traffic - which is something that live.com doesn't have. Yahoo is absolutely innovative as well. Buying De.li.cious, Flickr previously, displays the fact that they have recognised web 2.0 is a phenomenon. However, even with the amount of online traffic it generates and numerous innovative ideas, Yahoo was not able to turn it into cash.
Microsoft
Even though Microsoft has started on embracing web 2.0 but they are generally slower in adopting such technologies and making it a large scale product/offering. I do believe that microsoft, is serious about innovation (for example, web2.0) but they are lack of a vision and possibly talent as well. Microsoft would be buying yahoo's innovation, people and online traffic (thus advertising revenue / large user base).
If Yahoo is acquired by Microsoft, there will be massive job cuts and I am not sure if Microsoft would be able to fully take advantage of Yahoo's innovation and the Yahoo 'spirit'.
Preventing the buy over
Yahoo isn't good at search and to prevent them from being bought over by Microsoft, Yahoo can cut a quick deal with Google, outsource search to Google, focus on content and innovation and that would prevent the buy over. However, I am quite sure this deal will go through.
Conclusion
This is a good move for technology in general. Microsoft is serious about innovation and improvement. This buy over is not about competing with Google on search but at a higher level - innovation and traffic. In general, this is good for web 2.0 and enterprise 2.0. More innovation, more fun and more improvement. I do hope that this deal is all for the better.
Microsoft and Yahoo - what it means for web 2.0?
Sunday, February 3, 2008
Posted by Sean at 4:53 PM
Tags: enterprise20, itstrategy, web20
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2 comments:
It's also a bit sad to see that the majority of Microsoft's innovation has been acquiring their smarter/smaller counterparts thus far, not that it is a bad as I strongly believe in strategic M&A for growth.
I also believe Yahoo search is a lot stronger than Microsoft's search engine, and with Microsoft not making as much in their ad/search businesses, an acquisition of Yahoo will be the right choice for them to go head on with Google.
No wonder Google is sooo keen to prevent the merger from happening.
You're right. Microsoft made the right choice going forward but this M&A deal will be a difficult one to manage. Microsoft has to becareful.
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