The Microhoo Deal (Microsoft/Yahoo)

The big news in I.T. these days, and in big business in general, is the Microsoft/Yahoo deal.  There is too much to report for me to run down here, but thought I’d opine a bit about my own gut instinct as to where this could be headed.  There are a couple of schools of thought, which I may or may not agree with, but are interesting nonetheless.  My take?  Read on.

My own gut instinct was that Microsoft wants to be Google.  Think about it:  Google is the one getting all the attention these days.  Google has a lot of good, free services.  Google has Gmail, arguably the best free e-mail system out there.  But Google is also sitting on mountains of cash.  So is Microsoft…but MS wants more.  Google is basically in the advertising business now, a huge revenue generator.  MS wants in on this.  They do have their “Live” search, but do you honestly know anyone who really uses it regularly?  I don’t.   In fact, web searching has turned Google into a verb.  Can’t find it?  Google it.

MS wants in on the ad business.  And why revamp or refine Live Search when you can go buy Google’s closest competitor?  Enter Yahoo.  MS gets a better search engine, buys into existing revenue and IMHO, by their way of thinking, having Yahoo’s tech staff along with their own staff of programmers could only mean that MS could seriously contend with #2.  The only fly in the ointment?  People don’t like MS as much as they do Google.

MS mirroring Google could also mean something else: MS Office moves to the web.  Google has their own Google Apps, which include a spreadsheet, word processor and presentation program (like Powerpoint).  Granted, they are limited in function, but they probably provide 95% of the features most people use.  Collaboration is easier online–I’ve shared documents with others in more than a few instances.

Having MS Office online would be one place where MS could eclipse Google’s offerings.  In fact, I can see MS offering Office on a subscription basis.  Would you pay $5/month or $50/year to access Office online?  You might.  You would never have to install the Office package on your computer.  You could use it from any computer, and have access to your documents anywhere.  Software updates would be a thing of the past.  And if Office moved to a totally online environment…no more pirated copies of Office.

But, back to the deal.  It has already bombed, and yet MS is rumored to be attempting a hostile takeover by purchasing as much Yahoo common stock as it can.  MS wants Yahoo, but Yahoo doesn’t want MS.  Hmmm.

On today’s Cranky Geeks broadcast, Dvorak’s guest Adam Curry mentioned that MS bidding for Yahoo could just be an attempt to “mess with” Yahoo and, eventually, take them out of the running completely.   In other words, run them out of business.  I don’t really know what that would accomplish, but it’s another interesting theory that could play out.  Think of all the software companies that MS has acquired over the years, then “swallowed”, effectively buying out and killing their own competition.

Food for thought, and all guesswork, I know…but as big a deal as this is, any outcome is no doubt going to have some serious repercussions down the road a bit.