Open-source silver lining in Microsoft's $44.6 billion wedding vow to Yahoo?
Microsoft and Yahoo, together forever. Could open-source offspring be the result?
According to Terry Semel, former CEO of Yahoo, the last time Microsoft approached Yahoo to buy some or all of its search business, Yahoo turned the Redmond giant down. Flat. As for an offer to acquire all of Yahoo, that "conversation has never come up."
"(Yahoo and Microsoft discussed) search and Microsoft co-owning some of our search. I will not sell a piece of search--it is like selling your right arm while keeping your left; it does not make any sense."
But that was then. Now Microsoft has put down a $44.6 billion offer for Yahoo that Yahoo surely can't refuse under present circumstances. Especially since it will give customers a new choice, and Microsoft is all about offering customers choice...or so it says:
Today, the market is increasingly dominated by one player, who is consolidating its dominance through acquisition. Together, Microsoft and Yahoo can offer a credible alternative for consumers, advertisers, and publishers.
Yahoo would be foolish to decline, given its recent travails. What is most interesting to me in all this is how it could drag Microsoft into the next generation of open source.
Yahoo has increasingly been involved with open source over the past year. Zimbra. Hadoop. Yahoo User Interface Library. Etc. Yahoo has been aggressively moving down the open-source road. Would Microsoft help or hinder that progression?
I doubt that it would reverse course. In fact, I suspect that it would give Microsoft a convenient excuse to reverse course on its open-source antipathy and embrace it--at least in the context of the Web. Given how the Web works, with the focus on proprietary data while building on open APIs and open source, Microsoft could both embrace open source and retain its proprietary past at the same time.
I don't think a combination of Yahoo and Microsoft is going to reverse Google's increasing search dominance. As Terry Semel said in 2006:
My impartial advice to Microsoft is that you have no chance. The search business has been formed.
He's probably right. But the real question is whether a Yahoo-Microsoft combination could aggressively outflank and compete with Google in a range of other things beyond search. I suspect that it can.
And open source is one of them.
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 chief operating officer at Canonical, the company behind the Ubuntu Linux operating system. Prior to Canonical, Matt was general manager of the Americas division and vice president of business development at Alfresco, an open-source applications company. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure. You can follow Matt on Twitter @mjasay. 
There are enormous synergies in this merger, and many benefits for advertisers.
Yahoo! has a strong consumer franchise, and technically very strong search and advertising match capabilities.
Yahoo! is let down by unfriendly and inefficient processes and services for its advertisers, however, which is why it generates advertising revenues, but is not great at generating good profits.
Digital Marketing blog - YaSoft! or MicroHoo! ?
Verizon or AT&T would be a better deal.... Or Google buying out Yahoo now that would be a sweet deal.....
Verizon and AT&T use Yahoo to power their Internet services so they would win-ut in a buy of Yahooo. Esp. Verizon which is rolling out FiOS and could use Yahoo as a nice content backend for their Fiber optics service.... Yahoo would be a sweeet content deal for Verizon.....
But, let's not forget that depending on the license of the open source project Microsoft may not be able to kill all of it even if they wanted to.
They ended convering everything to MS.
http://www.guardian.co.uk/business/2008/feb/01/microsoft.microsoft?gusrc=rss&feed=technology
"Consolidating capital spending" means axing a lot of Yahoo R&D. When Ballmer says "single search index" that means he might axe the Hadoop folks and focus R&D on the Norwegian company they just acquired. What this does is provide a good deal to shareholders, but it creates a diaspora of smart folks to create the next round of open-source startups, no?
My interesting story.
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