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February 5, 2008 6:05 AM PST

Microsoft and Yahoo: A marriage made in Internet heaven

by Steve Tobak

Microsoft's unexpected marriage proposal to Yahoo has been the talk of the high-tech town. Who would have thought a possible geek betrothal could rival the coverage of Angelina and Brad?

And even though Microsoft has yet to get an answer from its intended partner, I've got a pretty good idea how this deal's going to go down. Here's my take on the outcome with respect to all involved parties:

Microsoft

It sucks being No. 3 in every Internet business metric--search, advertising, and properties. Microsoft is desperate to gain market share on Google. Also, it would probably be a good idea to turn a profit in its Internet business one of these days. That's the only reason Steve Ballmer's willing to take on the Yahoo mess.

Don't forget, the cost to the software behemoth means nothing. Win, lose or draw, Microsoft has nothing to lose and everything to gain.

Yahoo
As I said in previous posts, the board messed up in appointing Yang as CEO and now faces a not-so-difficult choice: reject Microsoft's offer and then what? Yang isn't capable of turning the company around, so what's the board going to do? Dump the co-founder and bring in an outsider with shareholders and employees running out of patience?

Not very appetizing.

And there are no other suitors desperate enough to take on the challenge and rich enough to afford it. Microsoft has made Yahoo's board an offer it simply can't refuse. And that's exactly what Ballmer had in mind.

As for Yahoo's employees, who knows? I hate to be brutally honest, but in this equation, nobody really cares; at least not the boards and investors of either company.

Customers
With both Yahoo and Microsoft floundering and Google looking like it's going to run off with the whole enchilada, I have to say the merger's good for end users, advertisers and everybody else in the Internet food chain. It's not like either Yahoo or Microsoft has any other real options.

Here's another way to look at it. What would telecom service and rates be like with Verizon and no AT&T? How about the oil business with Chevron and no Exxon Mobil? Well, without this merger, you may be reading this blog on the Googlenet, someday. And that can't be a good thing.

The feds
Who are we kidding? Scrutiny from regulators? There are no antitrust implications of this merger, period.

At the end of the day, I say Microsoft and Yahoo will have a lovely wedding and an enthusiastic send-off from Wall Street. And then, as with all marriages, the challenges will really begin.

Steve Tobak is managing partner of Invisor Consulting LLC. He is a member of the CNET Blog Network, and is not an employee of CNET. Disclosure.
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by Jake Leone February 5, 2008 7:26 AM PST
False analogy. A Yahoo + Microsoft deal will decrease competition.

Microsoft and Yahoo, will simply make one Microsoft, and its associated internet policy. What internet search engines are competing for is attention, and one trip to the tabloid isle, Monday morning talk-shows, about 75% of the news will tell you that dirt and piracy is what it is all about.

But the acquisition of Yahoo is actually about how Balmer is trying to get his mojo back, so he is using the spoiled brat money trick, if I can't compete with them, I'll buy myself a Golden Ticket.

Unfortunately, money won't solve the problem. It takes basically extreme evil to do what Google does. Google hides their evil with a bright mask, it's hard to see until you are the victim.

Google is the papparazi on steriods.

Google is basically doing a very simple thing, they are indexing all the information they can get their hands-on. Google is without Scruples. Google would index your medical records, and probably will as soon as they get a chance.

So Mr. Balmer, if you want it to make "Sir" Balmer, then you've got be equally ruthless. Why don't you start by indexing all the personal information you can get your hands-on, and then keep it on the internet forever without any recourse for your victims.

And on the way, you can make available the copyrighted works of authors, you can hire a huge team of papparazi to take pre-emptive candid photos (of everyday people).

Can't you see why Google is popular, it's because people want to read dirt.

Unfortunately, it's harder for a dirty old-man to hide, than young perverts.
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by doncoche February 5, 2008 7:58 AM PST
I don't agree with that marriage, like Jake Leone said, that will decrease competition and although Yahoo earnings are not doing well, I think the company is still profitable. Also since a developer view, I like and appreciate all the things that YAHOO had shared with the community like the Yahoo API's and the Yahoo User Interface (YUI) libraries, all of those open source. I just hope Yahoo declines this proposal.
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by jture February 5, 2008 9:39 AM PST
Google is not feeling the least bit threatened by this merger, whether it happens or not.
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by giantpeach February 5, 2008 11:52 AM PST
MS search makes me wanna yak.
And this sorry product is going to spill over into the internet if it merges with yahoo.

If MS wants a bigger market share, they should work on having effective and simple (key word) search results... Which would probably (hopefully) be cheaper than $46 billion.

Google search... priceless.
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by jonloves February 9, 2008 7:48 PM PST
i wish the merger the best of success.

www.baxterpestcontrol.com
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by pqdina May 21, 2008 1:38 AM PDT
but now Microsoft and Yahoo haven't married.the marriage maybe need more time to become true.But my marriage came true, share my story http://www.ehow.com/how_2287997_marriage-using-ipod-movie-converter.html with you.
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by crespowu May 21, 2008 1:48 AM PDT
I think google will be reluctant to see this marriage.
Yotube Downloader
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by moninter June 9, 2008 8:43 PM PDT
I think it's difficult that microsoft and yahoo get married.
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About Train Wreck

Steve Tobak is a marketing consultant and former chip industry executive. Train Wreck provides insight into dysfunctional corporate behavior, among other things. When he's not airing the industry's dirty laundry, Steve likes to hang around the house, make believe he's working, and drive his wife crazy. Find out more at www.invisor.net or email Steve at trainwreck@invisor.net. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure.

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