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<br /> <b>Strict Standards</b>: call_user_func_array() expects parameter 1 to be a valid callback, non-static method unfancy_quote::strip_quotes() should not be called statically in <b>/home/martingo/</b> on line <b>166</b><br /> Martin Gordon's Blog / yahoo

Microhoo: Microsoft Offers $44.6B to Acquire Yahoo

Yesterday I was meaning to write about Amazon's $300 million acquisition of Audible, a match made in heaven, but today comes news that Microsoft is offering $45 billion for Yahoo, which pretty much eclipses the relatively straightforward Amazon/Audible deal.

There were no shortage of rumors regarding a MSFT/YHOO merger/acquisition in 2007, but no formal proposal was actually ever made public and Yahoo came out and said that a deal didn't make sense on account of the potential upside of the restructuring and strategic initiatives set for 2007. As Microsoft CEO Steve Ballmer states, a year has passed and the competitive landscape still hasn't changed. Indeed, Project Panama has done little to improve Yahoo's situation in the advertising space and search seems to be in the place that it's been in a while - an ever more distant #2 to Google. Perhaps even more indicative of Yahoo's true status, however, was this week's announcement of plans to layoff 1,000 employees.

In the eyes of most consumers, both Microsoft and Yahoo provide second-rate products. In the operating system space, especially with the lukewarm reception Vista received, Microsoft only has their incumbency to stand on. In the internet space, MSN is to Yahoo what Yahoo is to Google, if that. Yahoo does have some great properties, but they aren't the cash cows that search and advertising are, and receive both media and internal attention according. The growth opportunities of the workhorse properties, however unglamorous, are still growth opportunities and still have yet to be harnessed and perhaps this deal is the only way that these properties will get attention.

The deal makes sense to me from a competitive perspective, but does it make sense internally? Can these two behemoths really merge operations and culture well enough to come out a stronger entity? Or will their internal focus distract them so much that Google will be able to distance itself even more from Microhoo? I don't know enough about the internals of Yahoo or Microsoft, but I know that the success of this merger will depend on a few factors, including the compatibility between the cultures and structures of both companies and the appropriate handling of redundant properties.

In the end, I look forward to this deal going through. I think it will revitalize both companies, which appear to have been operating at less-than-full capacity over the past few years. In this sense, although fewer competitors in a market tend to decrease competition in that market, I think we'll see the opposite here. Though there's a very subtle feeling out there that since both are so behind the competition, both Microsoft and Yahoo are about to, or should, give up. This acquisition will give the resulting entity a much better leg to stand on against the competition.

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Google and Yahoo Afraid Of Microsoft?

I can't believe I missed this: Google Gears is available for WebKit. This was announced three weeks ago, but I just found out about it on this TUAW post regarding future Google/Apple iPhone-related announcements.

News of this makes me feel better about AJAX/HTML based apps on the iPhone, easing my concern over offline access to these apps. I also haven't seen many developers complaining about the lack of a "real" SDK on the iPhone, which makes me believe that offline access and home screen placement was discussed at NDA-covered WWDC sessions.

A big question I have is that amongst all this Google/Apple collaboration, Apple decided to go with Yahoo for the iPhone's bundled email solution and widgets (you'll note that the Stocks and Weather widgets now sport Y! icons). Could Apple be playing both sides? If Google and Yahoo were desperate to get placement on the iPhone, then perhaps they didn't want to (or couldn't get) exclusivity. Google and Yahoo are currently tied on home screen icon placement at two a piece (Yahoo is slightly ahead overall because of the mail tie-in, however).

The biggest loser in all of this is of course is Microsoft. The one-two punch: iPhone is going to take away customers from the Windows Mobile platform (RIM sure isn't helping them out either). Thanks to the Google/Yahoo integration, iPhone users will have an investment in Google and Yahoo's online services, driving usage away from MSN/Windows Live/whatever it's called now. After the iPhone, Microsoft will be facing increased competition from both the mobile space and the internet space.

There is a bright side to all of this for Microsoft. From any way you look at it, Microsoft is seen as the biggest competition to Google and Yahoo: Either Google and Yahoo compromised to "share" the iPhone, in which case they don't think they can handle Microsoft alone, or Apple didn't want only Google or only Yahoo on the iPhone, in which case Apple thinks that Google and/or Yahoo are vulnerable to Microsoft.

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In Search Results We Trust

Robert writes about how Windows Live search has gotten a lot better. He then wonders if it'll do them any good.

Now, the problem is, if Microsoft matches Google, who will switch away from Google? I won’t. The trust I’ve built since the late 1990s of searching Google many times a day without a problem is going to be a very hard thing to beat. To get me to switch Microsoft will have to be better than Google.

How about you? Does Microsoft (or Yahoo or Ask) have any hope of getting you to switch your default search engine?

I have to agree with him. Any time I use a search that's not Google, I'm left with the lingering thought, "Is there something missing here that Google would find?" I trust Google's search results completely. I'm not quite there yet with any other service. And I don't think I ever will be. First of all, I'm probably not going to search my default search engine, but if I did, I'd most likely go through a trust-earning period where I'd double-check all my searches in Google. It would probably be way too much overhead to be worthwhile. I'm right back to Google.

Heck, when I directed one of my Yahoo-favoring friends to do a web search, I told him to "just use Google" without even waiting to see if what we were looking for was in the page results.

Something as simple as the name has a profound effect on search engine choice. "Just google it" sounds right. "Just it", "just yahoo it", or "just it" sound awkward.

So will just being better than Google get me to switch? Probably not, since I'll have no way of knowing.

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Moving Past DRM

Warner embraces YouTube and now Yahoo is offering an entire album DRM free. The album is Jesse McCartney's Right Where You Want Me and will be available for the iTunes-competing price of $9.99. While the music may be of questionable quality, it might be a good idea to urge people to pick this up to send the message that we are willing to pay for DRM-free music.

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Three Tech Companies I Like and Three I Don't

Three Companies I Like

Apple. The whole culture around Apple is simply amazing. People make fake photos of press events and upcoming products. Press events are covered live by several web sites. Geeks have finally embraced Apple and Macs are becoming much more mainstream. Apple's products have always been innovative and set the bar for design (and now with the switch to Intel, performance) that everyone else seeks to reach.

Microsoft. I was originally going to put Microsoft in the "Three I Don't" side, but couldn't really think of anything more to say about it than "I'm not excited about them as much as I was 6 months ago." I think in large part that has to do with Scoble (and Niall Kennedy) leaving Microsoft, leaving me with 0 Microsoft bloggers in my blogroll. That said, Microsoft still has some great products coming down the pipe, notably Vista and Office 2007. They will, however, face a lot of competition in the next year, particularly in the video games division with the Wii and PS3 releases imminent (not to mention against Apple's Leopard in the OS space). Still, Vista RC1 seems to have gotten a lot better than Beta 2; the new Office Ribbon has also had good uptake; and the XBox 360 (with XBox Live Arcade) has been a wonderful platform for both mainstream and casual games and will have had a year's worth of experience before facing the Wii and PS3.

Yahoo. Things have been coming along, albeit slowly, in terms of the integration of Yahoo's Web 2.0 acquisitions into it's mainstream content. We now have "Add to" links on every Flickr page and Flickr thumbnails on bookmarks. Also, not only is Flickr's geotagging feature is great as a standalone feature, it also does a great job of showing off Yahoo's new map technology. I hadn't known that Yahoo had finally made the switch to AJAXy maps, but after using it with the geotagging, I almost like it better than Google Maps. There's only so much that can be different in the two map services, but I feel like Yahoo's does a better job of labeling minor roads and landmarks.

Three I Don't

Google. The "throw a bunch of stuff at the wall and see what sticks" defines Google's strategy and I don't like it. I feel that it's hard to build a following for a company when you haven't given your fans enough time to really like your products before throwing something new at them. I think it's also going to be tough for Google to balance monetization of user data and easing privacy concerns. You can either piss off investors by not adding context-sensitive ads to Writely (as an example), or you can piss off your users by making them question your commitment to privacy when they see ads related to their top-secret business plan show up in a sidebar. The features of Google that I use have been around for at least 2 years, meaning that in my eyes (and probably the eyes of many others), the company has done very little in the past two years, a long time in any industry, but an especially long time on the internet.

Sony. Talk about a lack of ability to listen to one's customers. Sony has been stalwart in their approach to the PS3. They've defended their outrageous price tags to the death and really think that more graphics and more power will make for a better gaming experience. The success of XBox Live Arcade (and the Nintendo DS for that matter) point more accurately to the future of gaming: simpler, casual and more fun games. Case in point: despite having Madden 07 at our fingertips, I think we've spent more time trying to get 6 black pearls in Hexic. Grand Theft Auto or Zuma. What would your mom rather play? What would you rather your 9-year old play? Gaming aside, Sony bills the PS3 as the cheapest Bluray player on the market. While $600 may be cheap for a Bluray player, I don't know if many people will pay anything for a Bluray player unless it can also play HD-DVD or until the dust settles in the format wars. By pricing their gaming system at $600, they've effectively created an alliance between Microsoft and Nintendo. For the same $600, one could pick up an XBox 360 and Wii and have access to both system's libraries, plus everything on XBox Live Arcade and whatever Nintendo releases out of their back catalog.

Palm. Since the release of the Treo 600, we've had only minor improvements in Palm devices. I love my 650, but is there really a viable upgrade path from it right now? The 700p has only minor improvements over the 650 and not something I would consider worth waiting two years for. In the meantime, RIM has introduced a more phone-like, "less wide" form factor for it's Blackberries with the 7100 and refined it with the Pearl. Even on the Windows Mobile side, we've gotten a slew of phones, both of the Smartphone and full handheld variety. The Motorola Q and HTC's lineup have made keyboards the norm for Windows Mobile phones. Windows Mobile has been updated just about every year since 2002, in comparison to the Palm OS, which has had no real improvements since 2004. We've simply seen far too little in the past few years, from what was once the overwhelming leader of the PDA industry.

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I Told You So, Google Talk Not Doing Too Hot

Google Talk's one year anniversary is approaching, and a report has come out saying that it's not doing too hot, just as I predicted. The fact of the matter is, there's no use competing in the textual IM space anymore; the market is saturated. Everyone is pretty much ingrained in what their social circles will use and no amount of smilie packs or client skins will change that.

What AOL/MSN/Y! and Google should be concentrating on is audio (though this market is pretty much consumed by Skype) and video chat. Making an excellent service centered around great audio or video chat and being the first to release it will practically guarantee you market share. There's only so much you can do with text, but the possibilities are endless for audio and video. We already see Skype bringing people together from all over the world to record audio podcasts, but imagine being able to do the same for video. Or have your recorded conversations be easily posted to your blog or YouTube. The numbers YouTube is showing prove that video is the next (current?) killer app of the internet. As broadband gains even more traction and companies like Apple make webcams ubiquitous by building them into their machines, video is poised to find its way into more application "genres" than what we currently see.

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WY! To Fight AOL

Microsoft and Yahoo have begun testing instant messaging interoperability between the two company's IM services in effort to better fight AOL's position in the IM market.

I really don't know how much it will help though. If they're looking for shear numbers, they've effectively cut their potential market in half since now there's no reason to have both an MSN account and a Y! IM account. I have both a Windows Live Messenger and a Y! IM account by virtue of the other services these logins offer (access to Office/Vista betas on the Microsoft side; My Yahoo! and Yahoo! Mail on the Yahoo side), but I have no reason to sign on to either IM service because I have no friends that use those services. The ability to use one login to have access to no friends on either service isn't very appealing.

Even still, in the age of Meebo and Adium, both multi-protocol IM apps, there's so much transparency between protocols that having to enter one less login name in the Accounts window is pretty inconsequential. Of course, having only one login name does have some benefits, namely synchronization. Now you will only need to worry about one buddy list, one status, one profile, etc.

Unless this interoperablity makes switching from AIM, I don't see it having much effect in the IM wars. What I do like about this agreement is the possiblilty of more Microsoft/Yahoo! collaboration and even the purchase of Yahoo! by Microsoft. Now that's something to chat about.

BTW, WY! = Windows Live Messenger + Yahoo! Messenger

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Move Over May Day, It's RSS Appreciation Day

Steve Rubel declared that today would be RSS Appreciation Day and he's got a handy tutorial for using RSS with Google Personalized Home Page. While it may not be much use to the technophiles, it's a great thing to share with your friends and family who may not be as tech savvy.

On a side note, my biggest complaint about Google Personalized Home Page (aside from the ridiculously long name) and what's kept My Yahoo as my home page for far too long, is that the three columns are the same width. I much prefer My Yahoo's approach with the main column taking up twice as much space as the two side columns. Still, My Yahoo can't touch GPHP's cleanliness; boy is My Yahoo ugly.

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Flickr thumbnails on

Flickr thumbnails now show up on

Originally uploaded by Martin Gordon.

I just stumbled across a thumbnail on the popular list and discovered that bookmarking a photo page on Flickr shows the thumbnail in I tried it myself with one of my own pictures and it worked just as well. Now all we need is for to read the caption/tags off of Flickr and apply them as tags.

Yay for two of Yahoo!'s acquisitions playing nice with each other!

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Yahoo's New Home Page Won't Do Them Any Good

TechCrunch reports that Yahoo is testing a new home page. It won't do them any good. It's still too cluttered. Even MSN Search (and, too) got that one right. Not only that, but the old site compartmentalized content a lot better than this new one.

Seth Godin said it best at his talk at Google. The techies send non-techies to Google because they'll know what to do and won't come back to bother you.

If Yahoo is going after Google, they should stick with an uncluttered site for everyone and let My Yahoo! users make their personalized pages as cluttered as they want. If they're not going after Google anymore, well, then they should probably let the world know.

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