Without Yahoo!, Microsoft is left to continue failing alone
Microsoft has officially pulled out of its offer for Yahoo!. With Yahoo! goes Microsoft's best chance to transform its culture and technology to become more open. With Microsoft goes Yahoo!'s best chance to get the resources and ambition it needs to grow strongly again.
As for Microsoft's (and Yahoo!'s) insistence that they can go it alone, Paul Kedrosky's suggestion to the contrary is spot on:
- If Microsoft could have solved its advertising and content problems organically, it wouldn't have been forced to make an outsize and humbling bid of former web wunderkind Yahoo. It's not exactly short of cash, people or need. To say that it now has the magic solution is, let's just say, the triumph of hope over recent experience.
- If Yahoo really had in place the pieces to make a run at being ... something, we wouldn't be seeing the key employee attrition and weak revenue/traffic growth that we currently see. After all, the only thing that saved Yahoo's earnings bacon in the just-completed quarter was money gifted from Alibaba gains. It wasn't a changed company that did it, and wasn't the magic of Jerry Yang.
The two needed each other. To be fair, I don't think Microsoft would have gained much in terms of search or web momentum from Yahoo!, because combining two second- and third-place competitors rarely yields a first-place winner, unless it somehow solves their core deficiencies. In the case of Microhoo, it would not have resolved the two companies fundamental inability to wage a strong battle with Google.
But it would have given Microsoft leeway to compete on a broader platform than .Net and other Microsoft technologies, which both pave the way for its success...and ultimate irrelevance.
The future is open. Google "gets" that. Yahoo! "gets" that. Microsoft? Not so much.
Matt Asay brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. Matt is vice president of business development at Alfresco, a company that develops open-source software for content management. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure.
