Microsoft Just Made Google's Year

At this point Yahoo! (YHOO) is dead man walking. Let's see - a $31 per share sword of Damocles hanging over their head, losing top employees amidst a sea of disappointment and uncertainty (see Horwitz, Brad) and no real plan except to say "Go away." Not a formula for success. Microsoft (MSFT) itself has opened itself up to a Pandora's Box of uncertainty, from both the perspective of "What are you doing spending $40 billion on Yahoo!" and "Sheesh, what is this going to mean for our culture and my job?" It seems to me that the Yahoo!, Microsoft and Google (GOOG) dynamic can best be characterized by the following metaphor: three brothers, one which is 5-years old, one which is 10 and the oldest that is 15. 5, 10, 15. Yahoo! Microsoft. Google.

Yahoo! is 5. Hippy dippy, Silicon Valley circa 1999 culture, never having made the transition to economic powerhouse like its older brothers. And this free-loving eco-chamber is now coming crashing down in the face of harsh market realities. Advertising share down. Search share down. Transition to a de-facto media company a failure. Now what? A plunging share price has made both employee retention difficult and rendered it a sitting duck for a potential buyer. And now its older brother, the big meanie Microsoft, is beating on it yet again. But this time it is an all-out scrap. The 5-year old is swinging but the long, powerful arms of the 10-year old are keeping it at bay. And this beating is causing a bunch of collateral damage - like losing friends, losing respect and losing its future. The 5-year old has and will continue to suffer badly from this encounter, no matter what happens from this point forward. His only hope for survival is by begging for protection and support from its tormentor, Microsoft.

Microsoft is 10. Graduated to middle school, feeling important, feeling like using some new tricks to impress the older kids. But still somewhat rooted to the past, in this case the heavy, software-based desktop franchise that is still the lifeblood of the company. And while Microsoft is picking on Yahoo! it is getting trounced in the most rapidly-growing markets by its older brother, Google. And it isn't pretty. MSN and Microsoft Live are just shadows of the Google search and advertising empire, and it appears that Microsoft has concluded that to make a run at its mighty brother it needs to impose a reign of terror on its younger brother. But this fight has left the 10-year old weakened as well. Looking desperate - why beat up on someone half your age? Clearly not a fair fight. Can't you go it alone with all those resources? Looking stodgy - do you really need those Yahoo! hipsters to breathe some life into that software-heavy culture? Looking financially irresponsible - just because you have $40 billion to spend is this really the best way to enhance shareholder value? All good questions. But in this case 5+10 doesn't equal 15, because this fight has taken years off both of their lives and the big brother remains above the fray, thinking about love, college and the future. What his younger brothers do is of little consequence, except insofar as their might be some good toys and friends to pick up after the fighting is over.

Google is 15. He is laughing - hard. "Boy, are my kid brothers dopes! I'm looking forward, living large, walking tall. I'm in high school but college is around the corner. I'm going to start my own company. And if my idiot brothers lose some of their friends because of the fight, they can come work with me on my company. And if my younger brother falls ill, very ill, I'll come and visit him and send my best but there is little I can do to help." Google must be thinking "Does Microsoft really want Yahoo! or are they simply trying to kill Yahoo! Either way, I win." Google will pick up top pros from both Microsoft and Yahoo!, who no longer want to deal with uncertainty and questionable business strategy, and for this Google will pay precisely nothing. Microsoft may end up spending $40 billion for something that has precious little value, as top human capital which is the real engine of growth will simply walk. Is the advertising engine and the other Yahoo! assets really worth buying the company, much less paying the control premium? And this doesn't even take into account the disruption and value destruction arising from the integration process, which is at any time and always a hairball.

And the end of the day those at Google must be shaking their heads. I think Larry, Sergey and Eric should send Steve a really expensive bouquet of flowers. He has simply made their year.

Microsoft’s Acquisition Of Yahoo: Not As Bad As Some Think

Microsoft’s Acquisition Of Yahoo: Not As Bad As Some Think: "Microsoft’s Acquisition Of Yahoo: Not As Bad As Some Think

The Microsoft is evil meme is alive and well this week as many digest Microsoft’s $44.6 billion takeover offer for Yahoo. There’s Flickr users protesting, talk of Yahoo teaming up with Google to block Microsoft’s bid, and general Microsoft is bad sentiment everywhere, even from Google itself. While Microsoft acquiring Yahoo may not provide the ultimate in happy endings to many, it’s really not as bad as some would have you believe.

Google’s response to the acquisition over the weekend was amazing in its veracity. Google and Microsoft have never been friends, but for Google to come out and attack the acquisition as it did can only mean one thing: Google is afraid, and that’s a very good thing. Internally Google believes that a combined Microsoft/ Yahoo will provide real competition to its dominant market position in search and text advertising, the very same position it has depended on to build its until recently huge share price and market cap. Google can preach about open access and open markets all it wants, but Google’s idea of open is only where users access it from one of its many web properties.

Gmail.Microsoft.com

Read this interesting post by Lenssen......again I am pasting it as it is and stealing some page rank from him .....   :)

What If Gmail Had Been Designed   by Microsoft?

from Google Blogoscoped by Philipp Lenssen

Today I want to ponder the question: what if Microsoft, not Google, had created Gmail? What would be the differences in that web mail client for users today? What if we apply some of the same design rules that brought us Hotmail, for instance?

To start, here’s the current Gmail homepage after you log-in:

First of all, we need to rebrand the application name to something longer. Let’s call this Windows Live Gmail, and add some of the visual elements connected with Windows. Also, as in Hotmail, there needs to be less space for the email subjects to make place for a reading pane, which is full of verbose explanatory help text*:

*Not shown in the screenshot, we’ll also throw in a security measurement that will prevent you from clicking on links in emails, unless you discovered the switch to mark a mail as safe. Another security measurement we’ll add is that you won’t be able to log-in with just username anymore but are required to enter the full username@gmail.com. Furthermore, we will change the browser URL from http://gmail.microsoft.com to the more professional looking http://by114w.bay114.gmail.live.com/mail/mail.aspx?rru=home.

For another design iteration in our inbox, we will need to camouflage the checkboxes next to the messages by putting a mail icon on top of them. Also, we need to break up messages from conversation threads into their individual parts. Furthermore, this version of Gmail needs to change from context-aware text ads to context-unaware graphic banners, which we’ll require to carry at least one clip art. Gmail currently has a chat box which I don’t use and thus find annoying, so I think we can build on that and expand it to a more full-featured chat widget, replacing the labels box. We’ll also adjust the spam filter slightly to show a couple of more bulk mails in the inbox:

There’s still not enough banner space available though, so let’s add a top row for ads and move the rest a bit more down. Also, to go back to the real Microsoft spirit, the inbox will now carry a maximum of 2 MB of messages – that was the amount Hotmail offered when Gmail was released with 1 GB in April 2004. Also, Microsoft-style, the actual start page of this service will not be the inbox, but a “welcome” splash screen. Please imagine the ads blinking at this point:

Somehow, this still misses part of the Microsoft feeling – the current design is just too bright & light, and it doesn’t have enough glamor. I’ll darken the colors a bit and add some smooth shades. Also, admittedly, Hotmail is a bit slower than Google’s competing service, so we’ll add some “loading” messages. Usually there’s less focus on unclutteredness with the Redmond guys, so we’ll add some MSN news bits and “special offers” where space is left. Plus, to increase user lock-in, let’s get rid of the “sign out” link. I’m also putting less emphasis on search, moving the box to the bottom right and replacing it with a dog:

Voila, we’re done... that was easy! Your potential, their passion. Coming up tomorrow: “What if Microsoft had designed Windows Vista.” Stay tuned!

[By Philipp Lenssen | Original post | Comments]

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Microsoft would be on Buying Spree

This is what Microsoft Chairman Steve Ballmer said in the recent Web 2.0 Summit in San Fransisco.

What are you interested in that Microsoft currently isn't doing?
"We'll probably buy 20 companies a year for the next five years. Most of them will be footnotes - we're talking about acquisitions of $50m, $100m, $200m. Those are good acquisitions and are important to us, and it's of strategic value. There aren't many things in the $6bn to $15bn price range, you're talking about a handful of things. In the meantime we'll probably buy a lot of companies from $50m to $1bn, so we'll continue to buy a lot of stuff. Email steveb@microsoft.com if you something to sell!"

Now Microsoft has started it again but this time MS is imitating Google by targeting only small ones. Yahoo hasn't declared the acquisitions strategy officially, but he is also in queue.