The Yahoo Microsoft Merger is a very good idea. Although Yahoo is in some ways a different culture from Microsoft, It seems to me that both of those corporate cultures have become bureaucratic, sluggish, and uninspired when compared to Google’s freewheeling yet very productive approaches. Yet very importantly, the thousands of Yahoo and MS employees are very impressive, and certainly capable of great things as the online world is reinvented on a regular basis.
If Microsoft can pool the innovations of the LIVE project with Yahoo’s superb developer support programs, and hire and inspire more people to have the evangelical zeal of Googlers, it could be a whole new online ballgame.
The big reason this makes sense is actually very simple, yet is seems to be missed by many analysts now ranting about this as a bad idea. It’s a mathematical reason. The traffic from Yahoo+ Microsoft is very substantial. Yahoo had more total traffic than Google before the merger – it just didn’t have as much of the lucrative search traffic and did not monetize the traffic as well. With Microsoft traffic, the combined Yahoo Microsoft company will still initially lag Google in search traffic, but it will have *far greater* total web traffic. This is hugely significant, especially if Microsoft begins to focus more on how important it is to drive potential searchers to search portals inside their own network. Fear of lawsuits and lack of interest in what for Microsoft was a small revenue source led them to failure in the search business. Although the LIVE project was inspired, search share still lags so far behind Yahoo and Google that rolling all this into Yahoo search makes a lot of sense. The combined company would control an enormous share of global web traffic, and it won’t take too much imagination or innovation to redirect this far more profitably than now.
Microsoft remains the overwhelmingly huge legacy player in the information technology space. Google is the clear leader as the new player. Can Yahoo inject enough energy into the monstrous Microsoft machine to compete effectively in the online space? I think there are many potential pitfalls, but on balance you need to do the math, which says that in online footprint, content, and market capitalization:
Microsoft +Yahoo > Google.
News release from Microsoft
Disclosure: I have Yahoo shares. In fact I doubled them on Tuesday! Yippee!
Joe Duck 
While, I agree that there are ways that Microsoft and Yahoo can benefit from each other, I disagree that a merger is a way to reach those benefits. The primary problem, as you mention is that they are both giant, bureaucratic companies companies having execution problems. Combining 2 giant, culturally different bureaucracies is not the recipe to speed up innovation, it will throw cement into both their works. Especially if Microsoft starts imposing a .net infrastructure on them – not that there’s anything wrong with .net – but that will be significant for Yahoo, even if it starts small. I don’t see it… strong partnership, mutual stakes, I think those would be more reasonable ways to join up.
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I think it’ll most likely prove to be a horrible move, depending on how Microsoft handles it. I just can’t imagine them handling the whole transition and ownership of Yahoo properties well.
From what I’ve seen of Adcenter’s platform, I’m not psyched about them managing the future of YSM. Maybe they’ll let the current YSM team continue to manage it, who knows.
It’s a gamble, that’s fer sure. (of course NASDAQ itself serves as a upscale casino for the American bourgeois and the IT sugar-daddies). What’s interesting is how Microsoft execs decided that MSN was no longer just a software company specializing in operating systems (or that other great rip-off Word), but morphed into sort of a mega-media-production company, and now join the battle for “who will be the Search-engine Pimp”.
Exciting: though more exciting would be some politicos with enough spine to enforce Zee Regulations, and file anti-trusts on MSN, Yahoo, Google, etc.. That said, it might be recalled the great Contrarian, Karl Marx hisself indulged in some speculation: imagine his joy had he some yahoo stock and it magically climbed up a few clicks merely because the Big MSN said they might buy out the Yahoo boys. Ah the wonders of market manipulation. (;))
NASDAQ itself serves as a upscale casino for the American bourgeois and the IT sugar-daddies
Ha – indeed it does. Seems to me that a market model should use casino-like behavior analysis rather than more rational stuff.
I agree that the merger is a good idea, however, I don’t think search is the way that Microsoft is going to be able to beat Google. I think Microsoft’s money is what may beat Google down the road. If Microsoft can wear Google down and keep them in the game, competing hard to remain in first, Google will run out of money and Microsoft will win. Does that mean Google will go out of business? Who knows. I guess anything is possible, but that’s not likely.
Redmond is stressed and really cannot see anyone being greater than it. It is definitely good for us.
Microsoft has definitely done the good for the world despite monopolizing the market and making real good $ out of it.
Google is the best thing that could happen to search engine so far. So now with Redmond desperate on its tail as a consumer we get 2 choices a better and upbeat delivery from google and a valiant effort to make it better from Redmond. Now this can only be possible for redmond if he buys off a company than sit and invest in infrastructure and people to develop it for him.
bothways as we all see it, it is a gain gain for every consumer. I hope google does not foil it by pushing a larger pie at yahoo now.. 😉 then the whole equation changes. Google will have fantatic meta search and added to that a directory capability. Redmond would turn real pink on that though.