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My thoughts on the Microsoft bid to acquire Yahoo.

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This is Leo Notenboom for

Because I spent a majority of my career at Microsoft it’s no surprise that
I’ve been getting asked what I think of the recent announcement of Microsoft’s
intent to purchase Yahoo. I don’t really have any “inside information” but that
doesn’t stop me from having an opinion and perhaps a little different

First, I’m not convinced it’ll actually happen. There are many barriers, not
the least of which is today’s rumor that Yahoo will actually reject the amazingly high
offer. One thing I can say is that I don’t think anti-trust issues will pose a
problem. There are simply too many competitors in almost all of the areas that
the acquisition might impact for some kind of unfair advantage argument to be

If it does go through though, let’s be clear: regardless of how it’s phrased, this
is not a merger, this is an acquisition.

OK, I’ll say it, it’s an assimilation.

The term merger might be used from time to time to make people feel better,
but I agree totally with the pundit who said “What do you get when you combine
Yahoo and Microsoft? Microsoft.”

Why? Because while this might be the largest, this is not Microsoft’s first
acquisition. Powerpoint, Visio, FoxPro, even the ubiquitous Hotmail and several
other products are all part of Microsoft not because they were created there,
but because they were acquired.

Microsoft has lots of experience with acquisitions.

Should the deal go through one of Microsoft’s first issues will be the
resulting exodus of Yahoo employees – you know that a high percentage just won’t be
interested in working for Microsoft. And yes, I would read a lot into whatever
actions, or lack of actions, Microsoft might take to retain them.

Some folks think that one problem might be that Yahoo’s technology is likely
built on open source non-Microsoft platforms. To me that’s a non-issue. Microsoft
is patient. Microsoft has lots of resources. It may take time, but, and again, I
know you’re expecting me to say it, so I will: resistance is futile. Hotmail
was once in the same boat – it didn’t arrive running on Microsoft platforms,
but you can bet it almost certainly is today.

I don’t have any speculation about why Microsoft is making this move. But I
can say this: Microsoft is not above killing projects of its own if it can
purchase alternatives that it thinks will give it a greater advantage. You may
recall that Microsoft attempted and failed to purchase Intuit, creators of
Quicken, some years ago. Microsoft was clearly not above discarding its own
product, and the team that went with it, in order to make that happen.

What I will say is this: should the assimilation occur it’ll be a long, slow
process. Slow enough that we might not even notice until a few years from now when
we look around and ask:

“Huh. Whatever happened to Yahoo?”

I’d love to hear what you think. Visit and enter 12222 in the go
to article number box to access the show notes, the transcript and to leave me
a comment. While you’re there, browse the hundreds of questions and
answers on the site.

Till next time, I’m Leo Notenboom, for

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4 comments on “MicroHoo?”

  1. I think I still have my “Grace Under Fire” award – it’s in a box somewhere. A relic of the failed Intuit acquisition… like the memories of federal agents showing up at my office door, “Please take your hands off of your computer and leave the office.” Would the Yahoo acquisition have the same scrutiny? Probably not – there’s just too much competition in the search market. Could Microsoft make something special out of the Yahoo acquisition? Perhaps – or maybe they’ll just cause a huge party at Google… just like the party the Excel team had when IBM bought Lotus…

  2. In case Microsoft does buy Yahoo!, what will happen to the millions of e-mail accounts subscribers to Yahoo! now have? How will MSN transfer all those accounts to their, or even the newest

    Hash: SHA1

    It’s WAY too soon to answer that.

    Hell, it’s WAY too soon to even be worrying about that. *IF*
    the deal goes through it’ll take years…


    Version: GnuPG v1.4.7 (MingW32)



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