February 2 2008

Microsoft-Yahoo, What Does It Mean?

Microsoft-YahooWith a day now to digest the Microsoft-Yahoo news, I still can’t exactly figure out what Microsoft thinks they’re going to gain from this. Yesterday, when I had the fun of assembling Microsoft-Yahoo: The Complete Coverage, I read somewhere around a hundred or more opinions on the subject, and no two of them seemed to agree what Microsoft is after.

Is it the search engine business? Even combining their two systems will only give them around a 34% Yahoo is about 23.7% and MSN is 10.3%) share of the search engine market, still well behind Google’s 57%. Is it worth $44.6 billion dollars to get a firm grip on second place? Doubtful.

Yahoo’s advertising sales are nowhere near Google’s, so another case of settling for second.

I honestly can not figure out what Microsoft thinks this will gain them. Neither company has the best track record for progressive management, and both have been languishing as of late in the web. Do they think two idiots will make a brighter Internet star? Just take a look at Gmail, for all of its flaws, it is still light years ahead of Yahoo Mail or Hotmail.

Even when I did find someone who favored the deal, they didn’t totally grasp why it was being done.  If I was too hazard a guess, I would have to say that Microsoft just decided they have too much money laying around.

What’s everyone else think?  Does this deal make any sense to you?

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