No prizes for guessing which other company prompted this move:

"Today, the market is increasingly dominated by one player who is consolidating its dominance through acquisition."

"This combination [MS & Yahoo!] enables synergies related to scale economics of the advertising platform where today there is only one competitor at scale."

Can't compete with their own product, so they buy an existing one off the shelf... I'm expecting an update to IE shortly (if it goes through and Yahoo takes their money) which will set all searches to Yahoo...

No no no no no no no!

It was bad enough when my stuff became BTYahoo! I like certain things about MS stuff, but please please please keep them separate from Yahoo!

If this goes through, Im outta Yahoo and anything to do with them (including emails and portal home page.). Nothings sacred with Microsoft anymore.

...for just about everything aside from Windows and Office.

1) Identify opportunity.

2) Realise someone's already come up with a neat solution.

3) Attempt to compete (and use questionable tactics if necessary).

4) Struggle to gain satisfactory foothold.

5) Buy competitor.

6) Glue it to Windows.

6) Profit (doesn't matter, it's driving Windows)?

Coming soon... MS bids for Nintendo (Wii for Windows)? Or resurrects Sega!?

Zimbra is an increasingly attractive alternative to Exchange, and just recently(ish) got purchased by Yahoo. Its future suddenly doesn't look so rosy.

Nuff said

there goes the neighbourhood. there's a reason I don't have a hotmail account, it's shit. now I'm going to be forced into one, joy.

"Together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market."

"Exciting" probably means adding Yahoo's "!" to a typically unwieldy MS name like "My MSN Live Hotmail Book Messenger!".

Contrast this with Google's simple "G" device...

"!" vs "G" it is then...

Microsoft! deal! smacks! of! desperation!

If you cant beat them, buy them..

as long as you have a big wallet

And we're very cross because it's not us.

"Today this market is increasingly dominated by one player."

Ha ha ha I never thought M$ would ever say this about another company!

Holy! Anti! Competitiveness! Enquiry! Batman!

You can be sure Goooooogle will bitching about this in due course. Any chance Google might try and buy Apple now?

"A year has gone by, and the competitive situation has not improved"

Read between the lines, and it sounds like Microsoft are almost saying "we need your help [against Google] and are prepared to pay for it"

What's this? Microsoft trying to suggest that monoploies are bad and competition is good? HA! When it suits them perhaps...

So in one hand we have Yahoo, who say they can improve but haven't really improved.

In the other hand we've Microsoft, who has a plan to kill Google, but now the Microsoft plan is to buy Yahoo. Their plan is so serious, that they're trying to buy yahoo...again. What is the microsoft plan to kill google if yahoo doesn't wants to be bought, try to buy it again the next year? Why all the spending in R+D in their online division, why live.com, if their plan is to buy a company that they admit that it's in bad shape?

This just shows how desesperate is microsoft.

$44.6bn?

Thats seriously over valuing Yahoo!

By $44.59bn

Has a nice ring to it

Yahoo! is worth that much???? Bloody hell, it's always seemed like such a cheap manky, spam ridden site. Like the Lidl's of search engines. The shop you'd rather not go to in case you catch something.

Google would be Tesco online I guess.

OK, well let's start from the premise that valuations of internet businesses are nearly as insane as they were during the dotcom bubble (previous purchases of bits of MySpace etc show that), but what on earth do MS get from this - the Yahoo brand?

As far as I can see, Yahoo has a crappy portal that looks like it was thrown together in about 1992; an email service; what else?

MS appears to be throwing 44 BILLION DOLLARS at something they already do (arguably better) themselves, in exchange for a declining market brand (seriously, who uses Yahoo any more? 5-10 years ago, maybe, but now?) that is basically dead in the water.

What am I missing here?

I've worked with internet technologies for 10 years at an ISP. Searching has become synonymous with Google. Everyone I know says 'Google it' instead of 'search' for something. In addition most people I know have Google as their homepage.

What can a Yahoo!/Microsoft hybrid really offer that they're not doing already?

This act seriously shows how vulnerable they feel by the domination of Google in WWW. Wonder what excuse Yahoo can come up with this time. After all Steve's made them an 'offer they can't resist' or can they ???

Here they come to save the day!!

Thank God we have a company like Microsoft who're willing to challenge monopolies at every turn!

...not the 1st of April.

Hit 'em with the other chair!

exactly how many Yahoo! Stock! Holders! actually fell of their chair when reading this.

So it's the usual MS strategy is it? So rather than bother developing a better gathering engine for MSN, lets simply buy a huge database from

someone else, that already has all the data we want.

Oh and and Yahoo execs better speak to MS building facilties to make sure they get the same contractors in to secure the furniture, especially if Mr Ballmer is making visits.

i suppose I will have to stop using yahoo now.

the only company that can hold a monopoly is Microsoft. In the online services area, we must have competition.

In the software area, not.

Looks like the rationale here is online advertising, according to MS's statement & letter to Yahoo! (apparently there's a 'synergy', as opposed to a 'gestalt').

So expect a Yahoo! portal tightly integrated with later versions of Windows/Internet Ex-sploder, with Office online somewhere in the mix (and lots of lovely, lovely Web 2.00), all supported by absolutely tons of online ads.

Can't really see any of the competition watchdogs doing too much about the proposed acquisition, as they're already nervous about the Googleplex.

that's crazy money!

So Microsoft is offering a ton of cash and saying that Yahoo! sucks anyway, the old stick and carrot approach I pressume?

Who stole My coat?

Wow, MS are to become the largest users of open source software on the planet, and pay US$44.6 bn for the privilege or will they migrate to their own dogfood and bring Yahoo! up to the wonderful standard we have come to expect from Hotmail.

Icon, 'cos Bill runs BSD now

Yahoo own Flickr - one of the best photo sharing websites used by pro photographers and the rest of us. Acclaimed for its no-fuss minimalist ease of use of its many features. Yahoo also own del.icio.us is a versatile website bookmarking/favouriting tool, again winning on ease of use and simplicity.

I would hope that these invaluable tools are not affected by an acquisition. Microsoft may try to promote uptake of its own proprietary technologies by introducing them into these tools. And that would restrict how they can be used. Compatibility is the enemy of competition and using proprietary technology as a safeguard to profits is an outdated idea. Google have had phenomenal success without needing this approach.

nice timing of this when google announce their quaterly results, i guess microsoft are hoping to mitigate any regulatory questions by hiding behind googles massive earnings last year/quater

rather than innovate to compete to Google.

Sad that Yahoo is worth only $44 billion .

Expensive way to expand its customer base.

A better business model may be to pay each user a dollar for every search through MS live. 44,6bn buys a LOT of searches. The planet times 8,

PhilipN

the exlcaimation marks were necessary, today's the day!

What % of the webmail market share would Hotmail and Yahoo mail have together? Not sure what other segment this would lead to a more or less monopoloy.

Makes some kind of strategic sense to me. No idea on the financials.

Just hope MS don't screw up Flickr and Del.icio.us.

I'm worried about the El Reg Headlines if this does go through. Will El Reg put a ! at the end of all Microsoft stories?

What, you mean like Google?

"either cash or Microsoft stock"

Cash for me, I think. Lovely to think that Ballmer is grumpy again because someone else looks like being a monopoly...

I would like a credible alternative to Google. I do actually like the idea of another big player... Yahoo! and MSN can't truly be said to be in the same leaugue in terms of revenue (that's MSN - not Microsoft as a whole). With any luck they may use the privacy angle to try and hurt Google. It would be nice if it wasn't horded in quite so an alarming way by Google.

On the other hand, I have a feeling that it will be a case of two sinking swimmers clinging to each other as they both drown.

Due to the upcoming merger of Microsoft with Yahoo! There are new plans to charge for both MSN (And Microsoft Live!) and Yahoo Instant Messangers if you forward this e-mail to 100,000,000 people Microsoft and Yahoo will track it and pay you $0.02 for each "impression" by e-mail as well as reconsider charging for the services.

"Can't compete with their own product, so they buy an existing one off the shelf"... sounds just like the Yahoo modus operandi to me. Flickr!, etc. A match made in heaven

Yahoo! Toolbars! In Xbox! Blades!!

"Together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market. Developers, developers, developers!!"

'....someone is monopolising the market and it's not us!' - MS

Strangely enough I think it would be a downgrade of Microsoft for it to buy Yahoo!

Yahoo runs on BSD, MySQL, Apache(I think) and a goodly chunk of PHP if I recall. First that is going to happen is some propellor heads from Redmond are going to try welding Server2003, SQLServer and IIS into place. I imagine Jeremy Zawodny's resignation will not be too far away. Cue mushroom cloud. Goodbye Yahoo. Goodbye investment.

As for Zimbra (the company) - built on services for Zimbra (the Open Source platform). The services company is toast but the software isn't. Fork and be merry, lovers of freedom.

Most comments seem to be against the duopoly but as far as I am concerned Yahoo went to the dogs when it sold out a Chinese blogger.

I am ambivalent about the proposed deal but if M$ promise to ditch all Yahoo management, I shall probably not go Linux. Not that anyone would miss me.

"6) Glue it to Windows."

amen

How much scrutiny does it take to "Just Say No"? I mean, I can see how this offer might be attractive to Yahoo shareholders, but the rest of us have nothing to gain and potentially a fair amount to lose.

Why is it that the preferred corporate state of much of western capitalism is unregulated anti-competitive monopoly (or, in the case of some industries, cartel instead of monopoly)?

Do Yahoo produce anything other than spam? Did they ever?

Still, that's a phenomenal price tag. I'd value Yahoo at less than zero, that being the value of the site minus its liabilities as a potential source of legal trouble down the line. But then, I'd have said the same about YouTube (and placed a rather larger figure on the "potential legal liabilities" in that case) but Google still sucked 'em up.

I'm looking forward to the hostile take-over bid between MS and Google. It can't be long.

Coming soon... MS bids for Nintendo (Wii for Windows)? Or resurrects Sega!?

Successful Xbox brand anyone?

Duh

@Kris Will! Happen! Eventually!

Its like a guy in high school pestering a girl; eventually she'll give in.

It will be interesting to see how many folks (like I just did) setup their GMail accounts. Yahoo was the stable alternative for those who dislike MS and didn't yet trust Google. In my case, I would rather write note cards than have a email profile associated with MS.

On a business services level this play kinda makes sense (for M$ at least) - they get to advance from being a non-starter to take a larger slice of the web-spheric application pie gaining additional value for the Live! initiative from Yahoo!'s portfolio gems Flickr, Delicious etc.

Then there would be a question of how to merge (or not) search, messenger, email, and mapping platforms. This is clearly driven by a belief in advertising as a revenue model.

But - proprietry vis a vis open source; linux/unix - windows; php/python/c - asp/c#/.net; mysql - sql server.... nightmare! arrrgh...

This could be the iceberg that sinks M$ - lets hope they don't take Yahoo! down with them...

Way, way too much money. Could chop this down significantly and still get people scrambling to accept the cheque from the Bank of Ballmer. Yahoo is losing it's grip on the pole and the rats - sorry, shareholders - know it.

MS could have waded in with a lower offer than this. Not very pretty work by Redmond at all, and certainly not even to Paris standard which nicely leads me to my picvote.

When MS bought HotMail I dropped it for Yahoo! mail...

Now I have the kick up the bum I needed to get my own email sorted...

What do you think Yahoo have been doing for years? They lost the ability to develop software years ago and have been coasting on the cash they made during the dotcom bubble. Microsoft is buying a white elephant.

It's not good for the internet it's not good for open source projects like Apache never mind Zimbra (that would be buried).Google is no proper friend of OS and MS wants it dead , Yahoo! was doing a few things now thats in doubt. I hope Microsoft chokes on it. The only thing that really might keep this from happening is a rare FTC block.

That's a whack of money to be spending considering how poorly Vista is rumoured to be doing. They're going to have to rake in some cash eventually to be spending millions and billions of dollars on Facebook, Yahoo!, and any other businesses in decline or struggling to monetize their userbase.

Maybe the regulators could give Microsoft enough rope to hang themselves with?

I wonder how much that is worth.

yasoft!

microhoo!

coat!

taxi!

It bloody well better not, Yahoo was my first email account, and I still use it for everything not work or HMRC related. It'll be a nightmare to move away from it.

As I see it a lot of revenue by Google is based on fraudulent clicks (crappy sites that only live by clicking on their own ads), and Google makes is quite difficult to identify these websites and ban them from showing your ads. This certainly means that the revenue is quite bloated, because a lot of the marketing budged that goes into Adwords is wasted this way. It is not as bad as it was (or still is?) with Yahoo! (which is one of the main reasons why people don't like to spend money on their advertising solution), but a growing problem, and one that Google does not want to solve because is would cut off a but part of their revenue stream.

If Microsoft/Yahoo! managed to offer an advertising solution that is as easy to set up and handle as Google's AdWords (which seems to be quite difficult), but with better tools for identifying and banning fraudulent clicks, they could at least wrestle away a great deal of Google's turnover through their so called "content network".

In other words, if Microsoft/Yahoo! somehow manage to be less evil than Google in the online advertising market, they can win and this would be good for all of us who spend tons of money on Google's Adwords.

Google: Don't be Evil

Microsoft: Be Evil

Yahoo: Evil? Meh.

If we lose the middle ground then we will be stuck with only the companies that are obviously trying to knife you an back and the one that that implements Gknifeinback using AJAX then leaves in beta for years. We need the voice of apathy towards it's users!

Coat? Meh.

does this mean that yahoo will crash intermittently and load really slow?

I'll be keeping everything crossed that this deal comes off. Google could do with a good shafting.

Get it right, Google is the new Chelsea, MS is Man U. Fight the right fight.

Come on Microsoft!

Where the Schmuck/ Schmidt as the devil icon?

"Wiindows", surely?

This is a bit rich coming from MS:

"Today this market is increasingly dominated by one player. Together, Microsoft and Yahoo! can offer a competitive choice while better fulfilling the needs of customers and partners,"

I wonder what the EU competition commissioner will make of this...

One is reminded of the story of a snake that tried to eat a horse. The horse died, but so did the snake.

$50bn down the shitter just brings the day when MS throws in the towel that bit closer.

I say Go for it you nutty bastards!! and buy more Facebook as well, it may be dying but you can barely notice any smell.

Presumably one of the main reasons for such a takeover would be to get the Yahoo share of the search market. I suspect a takeover by MS would drive most Yahoo searchers to Google though....

Now thats the type of cash that opens anyones legs

It uses standard protocols to talk to the users. No ActiveX or FooBarLinuXScript that will lock out a competitor.

A replacement from Google only requires that they produce better results. And on doing so, every browser will be able to migrate just by changing "G" to "Y!" or whatever. No need to get a new OS. No need for a specific browser.

The barrier to entry exists because Google get a lot of money from adverts which means that the ad money isn't available for a competing product. However, if Google sit on their thumbs for a year, they will lose it and once lost, they may never get it back.

After careful thought, I'm having GREAT difficulty remembering anything that Billy and Steve bought that they didn't screw up royally.

On the other hand, if Yahoo! continues to fade as other posters have noted, then it may be interesting to see what happens to the value of the new combined company of MicroHoo! ( Wouldn't it be great to be able to say "Micro Who ???" for this entity ? )

Me: "Coming soon... MS bids for Nintendo (Wii for Windows)? Or resurrects Sega!?"

Adam Potts: "Successful Xbox brand anyone? Duh"

With what shall we measure success by? Market Share or Profit? Clearly you have to strike a balance between both factors. Xbox is going great guns as a brand, as are Nintendo at the mo. The difference is that Nintendo are making a healthy profit at the mo. As I understand it, each Wii sold = profit. But each Xbox sold = another chip off of Sony's block (and either no profit or an actual loss). But for how long? The Xbox adventure wasn't designed to turn a profit until after the it's third incarnation. They thought it was just a case of making substantial in-roads into Sony's dominance but they (like most folk) were wrongfooted by the tenacity and rebirth of Nintendo. "Duh" indeed.

Ten or more years ago, Yahoo was the internet big boy and had a handy (but ultimately insufficiently scalable) web directory/portal that did it's job. They've tried to keep up, by hedging their bets on the user generated content horse but the limelight was stolen before that when Google came along (and with tenacity comparible to that of Nintendo) changed the nature of the game. They delivered reliably useful search results. What's more, they had the good design sense to realise that folk don't want to be greeted with a visual clusterfcuk when they "open the internet".

Unbelievably, it took MS ten years to realise that aping Yahoo! with their MSN page was never gonna do the trick and that they needed something like Live instead.

But instead of having faith in their product, they've let their past baggage hold them back not only is Hotmail still a horrible thing to use, it's gained a horrible new name: Windows Live Hotmail, as per my 'MS Business Plan' at the top of this page - i.e. "6) Glue it to Windows".

Hmmm. "Windows Live Hotmail" / "Gmail" / Yahoo! Mail, with it's utilitarian name and cutesy "!").

Those names alone pretty much sum up the three companies and the understanding how the three companies understand how people wish to use the intertubes. That's before you even compare the actual products.

While we're on the subject, let's remember the "Microsoft iPod" parody vid (www.youtube.com/watch?v=aeXAcwriid0). I'm in no way on Apple's side, and yes, it's a little OTT, but it's another illustration of how Microsoft just don't seem to "get it". Time for the "Google to buy Apple" story to resurface after less than a year? (www.channelregister.co.uk/2007/06/20/apple_buyout_rumours/).

Of course it's idle pie in the sky thinking to suggest all these buyouts, but the point is that MS is fighting on many fronts. And it's struggling. Is it linked to the post above commenting on how growth seems to overshadow all other measures? It's the "Jack of all trades" trap. c.f. Google's YouTube buyout. Sony's struggles/triumphs knife-edge.

And so it goes...

"Today this market is increasingly dominated by one player."

Yes, and it will be MORE dominated by one player if MegaShaft buy Erwho!

Ballmer: "We just realized we can't f**ing kill Google after all, and the Navy won't sell us a specially adapted railgun so that we can fire chairs at Mach 7 toward the GooglePlex, so our best bet is to consolidate Yahoo's and our humiliatingly small market shares into one merely embarassingly small market share".

From Ballmer's office, in a few months:

"So the deal is done, these EU regulators finally agreed on a price?"

"Yes Mr. Ballmer. The videotape from that Las Vegas hotel room helped."

"Bwahaha... Yahoo is ours! And after we take over the advertizing income, we move all their ugly BDS machines to our nice, shiny Windows Server..."

"That's BSD. Yes, Mr. Ballmer."

"And then we start changing all them Yahoo, Flickr and whatnot sites to work only with IE."

"Sure, Mr. Ballmer."

"Oh, and that ZImbra thing. We kill it of course. We want everyone to use our shiny Exchange."

"The whole ZImbra development team already quit, Mr. Ballmer."

"Excellent! I won't have to deal with that bunch of hippies. No more Zimbra. Send our sales rep to moon the current Zimbra customers. Have them tell these traitors they are going to bleed."

"Err... Actually, Mr. Ballmer, all the Zimbra developers were hired by other companies that took over the development of the..."

"What?!! But... It's our intellectual property! Ours! OURS! We bought it! Sue them. Sue all the developers!"

"Well, see, the code is open-source. The license says it's legal for the developers to..."

"Aaaaugh... Developers! Developers! Developers!"

(Sound of chair crashing)

Well, they seemed to do pretty well with QDOS. Tripod did OK as well

(Better known as MS/PC DOS, and Visual Basic)

Nowhere in Microsofts statements does it say how they will magically make a profit from this purchase. There's plenty there to say there's stuff like "increasingly exciting set of solutions for consumers" and "competitive choice while better fulfilling the needs of customers" etc. blah blah.

When it comes down to it, Microsoft loses more money on everything it's got but its Windows desktop/server OS and MS Office. They lose more annually than most countries annual budgets. A few billion each year and somehow, this purchase is going to make them a profit by combining it with their other loser projects?

Someone else said it, they have been willing to spend billions annually to make sure any threat to their monopoly desktop OS is kept on track. New paradynes be damned, the desktop OS is the ONLY way to go. Says Microsoft and their mighty dollar.

This purchase is to lock those yahoo group users onto Windows by locking they technology used onto MS Internet Explorer. Same goes for everything else YaHoo offers. I really don't think the people really want to see a Microsoft advertising monster. It is bad enough how they push Windows and deny access to others by blocking the distribution channels with financial dis-incentives. This is not a good deal for anybody but some Yahoo stock holders. And even then, Yahoo has some good tech and could still grow quite nicely if they can figure out an execution plan. Giving up and selling out is copping out.

Doomed business model:-

Firefox

+ AdBlock Plus

+ Adblock Filterset.G Updater

and while you're there

+ NoScript

+ CustomizeGoogle

1) Buy Yahoo!

2) ????????!

3) Profit!

I, for one, welcome our new Microsoft overlords.

Maybe I can actually get a return on my investment of $0...

Considering MS is paying a 62% premium above yesterday's close for a company with declining search marketshare and is already plagued by turnover that will only increase because the Yahoo! and MS cultures are so different and Yanoo! offers a a group of customers who do business with Yahoo! because they hate MSN and Hotmail--I'll take the cash please....

...Linux penguin because he will only become stronger after MS misspends $45 billion on this merger.

You appear to be using a browser other than Microsoft! Yahoo! Explorer! to view this page. Windows! Live! Yahoo! requires the latest version (whatever that is, even we cant keep up anymore) of Microsoft! Yahoo! Explorer! to use this page. Dont worry, We're already stealth downloading it to your PC now (its a new feature in Windows 7!)

Thats an awful lot of money to just essentualy buy market share. Microsoft already seems to do most of what Yahoo does. They'd just be buying a brand.

A giant, unstoppable mega-conglomeration of mediocracy to battle against Google? I think I hear laughing over in Mountain View.

Seriously, Yahoo is better off apart. Yahoo may be able to outmaneuver Google every now and then if they're nimble enough. That means not having Microsoft to lug around. Maybe the strategy is that MS/Yahoo and Google with bleed to death in a bitter war, then MSN takes over the void.

What the fuck?

And they stil can't impliment an effective spam blocker

There's just one problem...

Yahoo blows.

fsck me!! They could buy a small country for that and have change left over (shit...microland. That's scary). For a company that is trying to claw back from a far and distant second place to a 'somewhere on the radar' second place to google?

Somink not right here. Combined yahoo and msn searches will get somewhere on the radar alright but google does what it does without any issues for most folks. It will take either a serious fsckup by google or some super wonder 'makes you tea and wipes your arse for you' wonder product to give folks a reason to change search engines and that doesn't look like its going to happen (and that's assuming MS can supply a search engine service as good as googles)

Nope, still doesn't add up. They did the maths behind this offer in their new spreadsheet?

Not sure about this but wasn't yahoo around quite a while before google? In the case of an IP pattent claim on search engines wouldn't yahoo have a few spare aces in the name of prior art? Wouldn't yahoo be able to cause serious harm to google if they had the funds to set the legal vultures on them? Are we about to drown in yet another wave of FUD?

As for google having any interest in buying yahoo, WTF? Why would they want to? Every time yahoo is mentioned folks think "the search engine that started turning out porn and adds with everything and got push out by google. Aren't we so lucky to have google". Yahoo trying to keep up is one of googles best adds.

cheers

So with the stock markets all around 2 year lows Microsoft makes a bit, and can claim to offer a large premium on trading price for the shareholders.

I think if the markets look as if they will recover then yahoo shareholders should/will hold out. If the market keeps heading down then I think people will spook and YMSNBC will be born.

Of course the inner tin foil beanie wearer asks if maybe Microsoft could have called in their debts to precipitate a collapse in the stock market in order to use cash reserves to acquire competitors in hostile buyouts.

Give me $5bn and I'll go and blow up every google datacentre... seriously, I'll throw in the Apple Campas for free.

Why buy Yahoo now? It's just announced that it's value is going down. The search engine is about as good as the one that Microsoft already runs ... so what does Yahoo have that Microsoft doesn't have?

Or let's put it another way ... what does Yahoo have that Google might want?

I think that Stevie is buying Yahoo messenger - arguably better than the Microsoft messenger, well integrated into the email client, and something that Google doesn't have but probably would love to get their hands on.

Could Google buy Yahoo? Probably not for regulatory reasons but there's nothing to stop Yahoo selling off various bits ... so viewed like this, it's probably quite a reasonable strategic purchase for Microsoft - they'll leave Yahoo as a separate search operation and combine the two messenger apps.

If they're smart they'll simply roll the Microsoft app up and migrate everyone over to Yahoo ... but given past performance it will probably get done the other way around.

What always surprises me with Microsoft is not that they make bad business decisions, but that they continue to make bad decisions, one after another.

I hope the Europeans can "Nip it in the bud" because the US will not. Microsoft has passed too much money around Washington, DC.

Dear Yahoo,

I have been a loyal customer for 10+ years. Come to think of it, I remember when Yahoo started on the internet. It was the coolest thing since canned beer. Alas, if you sell out to microsoft, you leave me no choice except to leave and never return.

Sincerely,

MSP

Coat, hat & copyright of any semblance of any name that resembles "Micro" & hoo!!", etc.

I remember when the choice of search engines was AltaVista and Yahoo. Google blew them both into the dirt. No idea why Microsoft is bothering with them, it certainly can't be for their search site. GMail is a stack better than either hotmail or yahoo mail too.

this is 8x larger than their largest previous acquisition and will probably be 100x more of a mess and at this price M$ believe Yahoo has the same value as Sony Corp

I bet the Google guys are laughing their socks off

"Together, Microsoft and Yahoo! can offer a competitive choice"

To what, the manual Rolodex? Microsoft's "searhc engine" migh be more aptly named the "pull something out of my arse and call it a result engine," and Yahoo hasn't had a viable search engine for years; too many irrelevant results, and no serious effort (nothing effective, anyway) made to prevent spammers from poisoning the results.

Or does MS want to consolidate the MSN Live/Hotmail user base with the Yahoo Mail userbase (thus alienating both groups)? Or perhaps the Yahoo Instant Messenger users can be convinced to bugger off along with the Windows Live Messenger users?

I don't know what this is all about, but one thing I am sure of - it's all smoke and mirrors, intended to distract attention from the *real* monopolistic move that Ballmer has planned.

Microland is indeed a scarey thought - just imagine Ballmer with access to nuclear missiles!

I shall, however, refrain from making a GWB comment here.

this is great news,

MS are going to flush $44 billion quid down the toilet on a search engines that sucks almost as much as their own.

I don't think it gets any better then this.

Vista going down the toilet.

Virtual Server going down the toilet.

MS Office 2007 down the toilet.

MS CRM *flush*

This is infact the very best thing that could happen to help microsoft put a few more nails in its coffin, sure it has a way to go but it's about as shrewd a move as aol times warner.

Go steve go, spend more money on companies that wont return a penny!

SuperHero

By the way, according to Alexa, yahoo.com is the most visited site on the internet, followed by google.com. So don't be to hasty to say "why are MS buying something dying".

<<Watch folks jump...

By mark

It will be interesting to see how many folks (like I just did) setup their GMail accounts. Yahoo was the stable alternative for those who dislike MS and didn't yet trust Google. In my case, I would rather write note cards than have a email profile associated with MS.>>

Amen brother! I just did the same thing - and added two new groups that I had run through Yahoo%

1: buy lots of yahoo stock when it is fairly cheap.

2: announce you are buying yahoo!

3: wait a bit while suckers buy stocks.

4: sell stocks

5: announce you changed your mind

6: profit

7: say all the money came from vista sales!

... takes trophy bride Yahoo for comfort in final years, but soon falls asleep on the job, suffocating new bride.

Google total 26.8% (3 month ave) ^6%

# google.com - 59%

# mail.google.com - 19%

# images.google.com - 9%

# video.google.com - 2%

# picasaweb.google.com - 2%

# groups.google.com - 1%

# translate.google.com - 1%

# maps.google.com - 1%

# Other websites - 6%

Yahoo total 27.3% (3 month ave) n/c

# mail.yahoo.com - 46%

# search.yahoo.com - 14%

# 360.yahoo.com - 5%

# yahoo.com - 3%

# news.yahoo.com - 3%

# login.yahoo.c97om - 2%

# wrs.yahoo.com - 2%

# answers.yahoo.com - 2%

# bid.yahoo.com - 2%

# sports.yahoo.com - 1%

So if a large proportion of yahoo mail users switch to gmail (as I will if it happens) then microhoo! will indeed be $hafted

"So the plan is we are going to spend almost 50bn on a dying internet search portal and crappy messenger"

MS stock was down 6.6% by end of trading on 1st of Feb, look at the graph on Yahoo Finance :)

The way for Google to compete with this bid would be to essentially buy out the heart of Yahoo!

Offer like $20bn just for Yahoo! Search (And possibly pick up Flickr since that's the cash cow, then merge it with YouTube) together with a name usage license.

Share holders would probably like this deal since that's a big payout for just one or two components of the Yahoo! portfolio (and Yahoo! search will never compete will Google again anyway), but they don't have to dump everything with Microsoft and in the process risk killing it all.

Since they weren't buying the whole company Google would probably get away with it without suffering at the hands of anti-competition laws.

Back in the days when I used to use Yahoo! ( < 2000) it was "Yahoo! Search powered by Google" then Yahoo! switched to the Alta Vista engine, and I (along with everyone else) dumped them like a sack of rocks. Google could bring Yahoo! Search back to it's former glory, bolster it's own product with the Yahoo! Directory, and solidify for all time it's leadership in the sector by owning both major brands.

I cant help wondering why so many comments seem to be taking Micro$oft's spin on this at face value, are people REALLY that gullible?

"We would value the opportunity to further discuss with you how to optimize the integration of our respective businesses to create a leading global technology company with exceptional display and search advertising capabilities." blah blah blah...

This is (presumably) a reference to Yahoo!'s search engine interests? Hmmm... is that really what's peaked Big Green's (envy) interest? Really? Just the cranky old, comparatively insignificant, search engine? I didn't notice any reference to any of Yahoo!'s other services. Perhaps Mr Ballmer isn't aware of them...

Instant Messaging market share

http://www.bigblueball.com/forums/general-other-im-news/34413-im-market-share.html

2006:

* AOL: 53 million

* MSN: 27 million

* Yahoo!: 22 million

* Google: 866,000

Post takover:

* AOL: 53 million

* Microhoo!: 49 million

* Google: 0.9 million

Webmail market share:

http://weblogs.hitwise.com/bill-tancer/2008/02/microsoft_and_yahoo_putting_th.html

2008 (US):

* Yahoo!: 55%

* Microsoft: 26%

* Google: 6%

Post takeover:

* Microhoo!: 80%

* Google: 6%

...and so it goes on. In fact, of the 15 categories compared by Hitwise, Yahoo! dominates all but 2 (searches and maps).

It's the *SEARCHES* you're interested in though, right Steven?

"Today this market is increasingly dominated by one player."

...that'll be Microhoo! then!

I do hope those nice people at Zimbra seize the chance to open the source code of the good bits (scuse pun) ...push, Blackberry, etc. *BEFORE* they become Micro$oft "intellectual property" ...and are crushed like cockroaches.

hahahahaha!

should have waited a few months, could have bought it cheaper!

(recession coming)

"Together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market."

Virtual machine consolidation ...

I cant help wondering why so many comments seem to be take Micro$oft's spin on this offer at face value:

"We would value the opportunity to further discuss with you how to optimize the integration of our respective businesses to create a leading global technology company with exceptional display and search advertising capabilities." blah blah blah...

...is that really what's peaked Big Green's (envy) interest? Just the cranky old, comparatively insignificant, search engine? I didn't notice any reference to any of Yahoo!'s other services so perhaps Mr Ballmer isn't aware of them...

http://www.bigblueball.com/forums/general-other-im-news/34413-im-market-share.html

Instant Messaging (2006):

* AOL: 53 million

* MSN: 27 million

* Yahoo!: 22 million

* Google: 866,000

Post takover:

* AOL: 53 million

* Microhoo!: 49 million

* Google: 0.9 million

http://weblogs.hitwise.com/bill-tancer/2008/02/microsoft_and_yahoo_putting_th.html

Webmail 2008 (US):

* Yahoo!: 55%

* Microsoft: 26%

* Google: 6%

Post takeover:

* Microhoo!: 80%

* Google: 6%

...and so it goes on. In fact, Yahoo! dominates 13 of the 15 categories Hitwise compared (all but searches and maps).

It's the "exceptional display and search advertising capabilities" you're interested in though, right Mr Ballmer? No anti-competitive concerns there then.

"Today this market is increasingly dominated by one player."

...that'll be Microhoo! it! seems!

"hahahahaha!

should have waited a few months, could have bought it cheaper!

(recession coming)"

b,

Quite possibly one of those desperate, lead balloon type initiatives, as recently favoured by Ben Bernanke and the Fed, to try and kick start interest in a moribund global business model. In other words, Steve doing just what he is told to do, like a good little boy. There is certainly no obvious innovation or logic in the move. There could be a lot of loose screws though, knocking around the Board room.

And we all know the way these things work. Microsoft only need to think back to themselves at the start. The Giant Killer Application comes out of nowhere from a nobody and proposes something so outrageous that it flies higher and faster and embeds itself deeper than anything thought of before. More of the same has never offered anything worthwhile and is never a wise investment, it is just a place in which to launder some cash normally...... which actually now makes Microsoft and Yahoo vulnerable to a Google takeover/makeover although all they would need to do would be to strip away their most valuable assets, which I suppose would be any of their Pioneer Programmers working in Financials.... the Jim Gray Hero types .... http://blog.wired.com/wiredscience/2008/02/berkeley-will-h.html

A little while ago, Microsoft bought FAST (http://www.fast.no/ http://www.microsoft.com/presspass/press/2008/jan08/01-08FastSearchPR.mspx).

This is basically the technology that would make Ya? Who? search somewhat usable. Getting a usable search system, WOULD attract users. Especially if they had the brains to allow a similar xml interface that you get for IE7, Firefox, Opera, etc (and get TO google, Live, ask, aol, lycos, yahoo, amazon cnet daily mail, eBay, Guardian Unlimited, Microsoft, Orange, Tesco, Times Online, Virgin.com, Wikipedia).

Now, why is this important?

Microsoft has started to see (part of) the writing on the wall. More and more governments in the civilised world (the part of the world that ISN'T run as a corporistic republic), are starting to mandate opensourced alternatives. In Microsofts mind, this is ONLY a matter of price, and has nothing to do with freedom. Remember, Microsoft bosses are used to a country where you can buy yourself new laws (if you're rich enough), and you can pay your way to get large government contracts. They are also used to having their home countries intelligence services using their capabilites to augment the competitiveness of national companies in international contracts.

Now they are facing competition they simply cannot understand. Both from Google (and that annoys the crap out of them), and from something they simply cannot understand: FOSS. FOSS is a nightmare for Microsoft. They simply cannot fight it, because there isn't a single company to attack, and the largest backers of opensource, such as Sun and IBM, are somewhat so used to ugly business tactics, that Microsoft cannot attack them. Atleast not all at once. Since Microsoft are deluded (by themselves) to think that the customers moving to FOSS software are only a matter of price (remember, all their "get the facts" marketing scams have been around suggesting that Microsoft solutions are somewhat cheaper. They ONLY look at price. It's the only thing they understand), they are thinking "we need a new revenue stream, so we can start giving away windows for free, and thus tie users to our other revenue streams".

Consider the following:

-Microsoft acquires FAST.

-Microsoft acquires Yahoo.

-Microsoft applies FAST technology to Yahoo search volume, and starts attracting users.

-Microsoft allows all kind of browsers xml-access to the search system. No reason to block them out, since each one of them applies a set of eyeballs to their ads, which is a good thing.

-Microsoft ships IE8, with no option to replace their web-based search in the browser window with alternatives as Lycos or google. Most end users find themselves accepting IE8, if it is reasonably bug free.

-If IE8 is well received, and usage picks up, Microsoft ships Windows Live Free Edition. It's freely downloadable from the net, and the only "restriction" compared to, say, Vista, is that you cannot replace the IE8 browser, and cannot install a mail client (force people to be using the "Live Services"). Every user is able to get a free windows, that is tied down to their Live YaHotmail, and their Live YaFAST-Search. All mail on their hotspam service is of course scanned for keywords, both for ads, and for NSA.

-All piracy of windows disappears, since those not interested to pay, can use the free version (still good for gaming).

Scary, isn't it?

//Svein

I think it should be called Moo! Search. It stands out from the rest of the crowd and is quite rememberable.

HI, I am sick to death about journalists that have to resort to vulgarity to get their point across. I learned a long time ago, its more effective for you to use regular words to say something like that, and a journalist should know how. Children are reading your work and so is rest of the world. The only respect you will get by using vulgarity are from those who spew it out of their mouth like air. Any fake word is not acceptable that is obviously a F word in disguise. You have lost a reader... and if The Register does not clean up its act, they have lost a reader. Big deal if Microsoft wants to by Yahoo, the two have been talking about it for years.

Seriously - Winhoo's 2009 by Moo!