Ask YC: How happy will you be if MS takes over Yahoo and do you think MS will benefit?

https://news.ycombinator.com/item?id=156804

by ideas101 • 18 years ago

7 27 18 years ago

news.ycombinator.com

My take on this is MS will fail horribly in the long run if it doesn't consider wish of other 2 important stakeholders (i.e yahoo employees and end users/customers) --- i'm very uncomfortable to see almost all the time that m&a is all about increasing value of the shareholders and not about increasing value for other 2 stakeholders. How far you can go if employees and customer are unhappy with the merger? which i think would be the case in this tussle of yahoo-ms merger ...

brk• 18 years ago

Well, I don't really use either of their products, so I don't have a strong feeling about the merger.

I think that the fall of Microsoft is eventual anyway, no company has historically maintained a strong dominance or monopoly in their industry over a long period of time. As things continue to change in the computing market, Microsofts sheer size works more against it than for it. We've all probably heard the story about how Microsoft almost missed the Internet in '95 or so. That one was easier to recover from than sinking billions of R&D dollars into a desktop app development when things suddenly go to apps in the cloud, or some similar thing.

At this point, I don't know that Microsoft can really benefit from any significant merger. They may however be able to fend off the inevitable for another few years with some strategic acquisitions though.

ideas1014• 18 years ago

i think u r right in the sense that i would rather acquire 10 different futuristic companies than just one jumbo that can fail terribly ... it would have been better if ms bought something like social networking, voip, cloud apps, virtual s/w for desktop etc. companies than just one single content provider.

tomh2• 18 years ago

what about the properties underneath the yahoo umbrella such as flickr, delicious, etc? what about the technology underneath the yahoo user interface javascript libs? don't forget that yahoo has diversified itself in media, for better or for worse, and the media diversity is something m$ft lacks.

smalter• 18 years ago

a small point: most yahoo employees/end users/customers are likely yahoo shareholders as well. so the creation of value for yahoo shareholders will benefit them as well. in any case, they can get a voice proportional to their share in the company.

ideas1014• 18 years ago

sorry, i didn't mentioned who are the shareholders? when m&a takes place its all about biggest shareholders who are mostly private equity or big venture funds and not the retail shareholders like you and me ... while customer and employees are located world over - for example a yahoo email user in a small village of china should also be considered as a value stakeholder because those type of users are in millions and in the same way an employee in the yahoo's r&d dept. in india is also as important as any other stakeholder.... so what would happen to ms if these 2 stakeholders switch their loyalty to the competitor (say google) after merger ???????

tomh2• 18 years ago

I think 'yahoo email users in china' might applaud the merger:

Yahoo Says It Gave China Internet Data: Journalist Jailed: http://www.washingtonpost.com/wp-dyn/content/article/2005/09...

inovica• 18 years ago

Microsoft have been buying small innovative companies for some time without a significant effect it would seem. I'm not sure that buying Yahoo! would make a great deal of difference to them either as I feel that Yahoo! is too big currently to be part of the next-phase. I might be wrong though - it has been known once or twice before!!

simplegeek• 18 years ago

I will not be happy at all because Yahoo might loose hackers like Doug Crockford and alike. The way he bashs Microsoft while he speaks is a clear indicator that he (or some others) might refuse to work with Microsoft. Moreover, if a company cannot market a product while spending whopping 6 Billion on research & having people like Ray Ozzie is doomed to hit a huge failure when it comes to Internet applications.

snorkel• 18 years ago

I use neither of their products but hope that Yahoo's shareholders will tell Microsoft to go urinate in a direction opposite the wind.

jeremiah• 18 years ago

I think you are absolutely right about pleasing the stakeholders, especially because good engineers are hard to find and if the engineers leave en masse, there will be problems.

I see the culture of the two companies as incompatible. Yahoo! is a FreeBSD shop, they use lots of Free Software, MySQL, etc. Is Microsoft going to rip and replace all those servers? If they don't, they are saying FreeBSD and Free Software is better than Windows. I see this problem as being a very expensive issue.

Secondly, Microsoft has never borrowed money before to purchase a company. They were having Bear Stearns help them with this purchase, and while Bear Stearns is gone, they still will need some serious capital and will go into debt. This will change their culture, their ability to attract investors, and the bottom line.

ideas1014• 18 years ago

the cultural clash, the technology clash, the reputation clash will cost ms dearly ... also employees who dont leave will stay there with the lowest moral which is even more dangerous than an employee leaving the company ... this will also create internal politics about who's right regarding selecting a technology and/or new apps and business.

Anyway this would be fun to watch as 2 different giant animals (dinosaur and elephant) coming together to rule the jungle - while all the other animals like lions, tigers, leopards will try to create an even game to ouster these giants.

okeumeni2• 18 years ago

I do not think MS will attempt to merge teams and technologies; they are smarter than that, not at least for a mid term. I think they will basically run two companies and go for the main prize: ads base customers and search traffic. They will keep both engines separate for a while and consolidate the ads business in general into a giant force in revenue making; this will be the main problem for Google.

tom_rath3• 18 years ago

I'll be delighted!

Combining Yahoo's high traffic with Microsoft's reasonably good ad management system would finally produce a competitor to Google Adwords (as outlined here a few days back: http://news.ycombinator.com/item?id=154184 )

Microsoft hasn't been able to build Live.com traffic and Yahoo is clueless when it comes to building a useful ad management system. Putting the two together should resolve both problems reasonably quickly.

gruseom2• 18 years ago

Microsoft sucks at the one and Yahoo at the other, but the two together should be good at both?

tom_rath3• 18 years ago

Yes.

Yahoo has been able to generate great amounts of traffic to their site, but their ability to 'monetize' it has been abysmal. They treat their free-for-use visitors wonderfully, but treat their paying customers (the advertisers) like crap.

Microsoft, for all gripes against it, knows how to build a decent ad management system and assist their customers (the advertisers). From my own perspective as an advertiser, their ad management system, customer relations, etc. are far and away superior to those provided by Yahoo.

If you keep Yahoo's content and rip out its horrible ad system, you'll have a winner.

aristus2• 18 years ago

I doubt very much that it will go well. I used to work for a small Overture-like search marketing company. We were purchased by Yahoo about the same time Overture was. Overture's bosses took over that end of the business, to the extent that we were given @overture.com email addresses. Then they sucked away a large percentage of developer resources for years to do their total rewrite called Panama, adding features we'd had in Brasil (Brasil!) for years. Our code got drowned in the bathtub, except in the countries and languages that OVT couldn't bother to support.

So there's an example where better code and cheaper infrastructure, already in hand and ready to go, lost out to Overture.

So you think Microsoft will fare any better with that maligant tumor? MSFT's tech is nice, but it's not (repeat NOT) ready for anything other than US English + Europe.

It's a disaster in the making.

tom_rath3• 18 years ago

Yes, I think Microsoft will excise that 'malignant tumor' completely. Why would MSFT keep it? They want Yahoo's traffic (and all the bright, shiny bits everyone is worried will be destroyed), not Yahoo's failed business model implementation.

okeumeni2• 18 years ago

I will be very happy for two reasons: -First for the shareholders, it will be a wave of fresh air for their equity which has been plunging in value. -It will be a good for the search industry; it will diminish the myth around Google and its monopoly, create room for innovative solutions in search technology and for new companies to grow.

amour• 18 years ago

MS will die a slow and painful death over the years if it doesn't change the way it does business and treatments towards its customers and other developers. MS also needs more innovation and invention rather than milking their ancient products. If MS takes over Yahoo and force its brand on Yahoo, it will take Yahoo down with it. Reinventing their image and mission as a company is probably a better and cheaper way than forcing to take over Yahoo.

Ask YC: How happy will you be if MS takes over Yahoo and do you think MS will benefit?

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