Microsoft-Yahoo: What Will Stay And What Will Go?

What about Yahoo’s Zimbra? Whats your take on that one? It was a pretty big aquisition for Yahoo and competes with Microsoft’s exchange service

ValleyGuy
apologies, there’s so many different services I totally forgot that. Microsoft isn’t keen on online apps because of the threat to Office. Either one of the Yahoo guys ends up running Microsoft’s internet strategy and we see a proper online Office suite, or Microsoft might kill it, either slowly or quickly. Either way, it’s one battle that will be heavily discussed internally and likely externally as well.

Duncan,

I disagree with some of this.

I imagine that a lot of the assets, like MSN and live.com, would sort of dwell without much support for years, and they would then be retired when it made sense. In the meantime the properties would share staff and content. Microsoft wouldn’t simply turn off all those user accounts at hotmail, for example. The brands would be maintained. I agree that Yahoo has significantly more brand value, so the focus would be there.

On the ad platforms, they would simply be merged. Quite possibly under a whole new brand. The key is that the advertisers and publishers would be melded into a single group to take advantage of the scale. Google’s has most of the publishers because they generate the most per click. That comes from having more advertisers bidding, as well as better technology. Microsoft’s adcenter may have as good as technology as Google, there just aren’t enough advertisers to make it an apples to apples comparison.

Stuff like Zimbra, Flickr, Delicious and the many other subbrands of Yahoo would surely be maintained. They’re valuable. Users would scream if they were ignored or shut down. No reason not to push them forward.

Regarding IM, Windows Live already has an interop program with Yahoo since Windows Live Messenger 8 (or 8.5, I’ve lost track), and vice versa for Yahoo Messenger.

it’s not about the technology when it comes to the website stuff or even the IM client, it’s about who has the users. They both do. Both brands stay.

Great list - not sure if I’d agree with all of them (OpenID implementation, no matter where it’s at). Some services will need to be completely rebranded and others completely left in the dust. Mergers bring change and change is always a good thing.

Hello,

on IM, my view is that Yahoo! IM will be merged into MSN. Having a bigger community is stronger that two smaller one.
See for a more developed opinion on merger impact on IM world: http://www.process-one.net/en/.....t_yahoo_1/

–
Mickaël

This is a sad day for all of the believers in Yahoo. Since 1994, most of us started to web surf with Yahoo; but Yahoo made crucial mistakes: 1. It didn’t buy ebay, when it could. 2. It didn’t buy Google, when it could. 3. It didn’t buy youtube, when it could. 4. It didn’t buy Facebook when it could. 5. It didn’t consolidate in one powerful Yahoo a Web 2.0 platform with all their properties (pretty cool individually, flickr, del.icio.us, upocoming…etc..) This will be their destiny. Yahoo will be remembered as a footnote in the history of the web, like altavista, excite, and lycos. Pretty sad.

Yahoo uses a lot of open source software, and have contributed a lot back in kind. Stuff like the YUI library, PHP, apache, FreeBSD. I wonder whether Microsoft will just let them be and continue to support them by way of retaining all those open source contributors in Yahoo’s employ.

I think they would integrate as much as possible however i dont think they would get rid of all the sites or either merge them

msn is on every computer they just have not been able to capitalise on this traffic

How do you rate? Check out http://www.yupnup.com

how about YAHOO MESSENGER vs LIVE MESSENGER ?

My take goes to a yahoo win on this one because of VOIP revenues. Yahoo MEssenger is the only serious competitor to skype for voip int’l calls so far.

I don’t like the idea of yahoo getting all microsofted…

Chris
IM = Instant Messaging in the post. As I noted, combined platform that supports both logins, possibly with both brands remaining on the same software

My biggest concern is about Yahoos love for open source and collaboration vs. Microsofts closed source approach. To be fair, Microsoft have increasingly moved towards openness, but I wonder what will happen. Yahoo is a php-company. What will happen there?

The open source community tend to be the ones liking yahoo, and the same people that dislike Microsoft. It’ll be an interesting transition indeed.

Micheal is right on this, no way they would kill any thing. I think if they are succesful they would then take 12 months to figure out what to do with Yahoo. It’s about building the ad platform and search so everything else will be left alone for the time being.

I think yahoo widgets will carry on but MS will develop a system where vista gadgets can use yahoo widgets.

The mobile stuff for yahoo might be killed fairly early on unless its a really compelling product.

I think we will have to wait 3 years or so to see how this settles if they pull it off.

I can’t see a private equity company coming in and stealing this deal because of the economic climit. Lets face it finding a bank that has not been killed by subprime to back the deal which over values yahoo is slime at best.

Yahoo Personals is a top contender in online dating in the US, whereas MS has a deal with Match in the US. Internationally both work with different partners, so that there will be a lot to be sorted out. The international side of a merge has the potential to be substantially more complex than the US side.

Here’s my post on the topic from yesterday morning:
http://www.centernetworks.com/.....ice-lineup

The interesting thing is in the comments there is talk about the differences between what is popular in the U.S. vs. the rest of the world.

There are also developer implications as well. And the music engines.

Neither of these patsies can deal with Google. What makes you think combining them will help? This has all the markings of another AOL Time Warner fiasco.

There are no lifelong jobs in Knowledge Economy friend, if you are good you eat your lunch.

http://tekno-world.blogspot.com

What’s the use of making such wild guesses? The deal isn’t yet finalized for heaven’s sake!!

My web site is hosted with Yahoo. If Microsoft assumes ownership of Yahoo, I will pull my account and find another host. I will not contribute to Microsoft’s proliferation.

great list. It is not 100% sure however

Personally I’m interested to see what comes of HotJobs. Microsoft uses Career Builder for their “classifieds partner” - will Microsoft replace Career Builder with HotJobs, killing a vital partnership for CB, or will Microsoft sell off HotJobs and retain the CareerBuilder relationship across both portal platforms?

They should just combine the ad networks. Part of the reason so many people go with Google is that reach.

The combination of MSN/Yahoo will once again make it compelling for advertisers to focus on something other than Google, ultimately pushing up CPM and CPC, so this merger will essentially finance itself from a balance sheet perspective if you take this fact into account and consider some of the fat which needs to be cut off Yahoo! anyways.

MSFT is the only viable player that can make this deal pencil and that is why it will win.

I think the overall merger of Yahoo and MSN will be good, competition will continue to force accelerated innovation, driving better products to market. I’m a big supporter of Yahoo, and enjoy many of their services. Will be very interesting to watch.

Just to let you know, Microsoft already has a photo app that can upload pictures to Flickr. It’s called, Windows Live Photo Gallery.

Yahoo Small Business is all powered by php and mysql and I trusted them for the past 10 years, very reliable. Time to move out my properties to another host.

Any suggestions? godaddy no need to apply.

Duncan, nice rundown of platforms and services. I admire your courage for staking a position on winners and losers this early in the game.

It’s easy to overlook Zimbra given Microsoft’s long history of buying software competitors. I’d enjoy hearing your take on the Maven Networks acquisition - what should have been a (minor) triumph for Yahoo but turned into the $150 million heard ’round the … block.

Michael, I agree with you that the merged entity would maintain separate brands and properties. Hotmail, MSN Hotmail, Live Hotmail … Microsoft’s branding failures alone would warrant separate brands.

No one wants to change email addresses, despite the availability of services like Plaxo. The solution is typically to add another alias or email service, with the worldwide number of gmail/hotmail/yahoomail “triple plays” wholly unaccounted for.

Even Time Warner had the good sense not to change @aol.com to @timewarneraol.com.

mike’s comment#3 makes a lot of sense.

Let’s pray we don’t have to enter the domain name while logging into a website. Like that stupid hotmail.

It’s not as simple as adding numbers from one column with numbers from another and saying ‘look, this is what the final outcome will be’. Remember that MS only said that they love the Yahoo brand…not the technology. MS said that they would catch Google in technology last year, they aren’t about to admit defeat and start using Yahoo’s tech.

At the end of this, Microsoft will own three different places to search, Yahoo, MSN and Live.com. Are you kidding me? They have enough confusion with MSN and Live, throwing Yahoo into it will only drive more users to Google which of course is superior in every way.

With their two portals, I can’t imagine both staying open since that will just be confusing. Do we see ‘MSN powered by Yahoo search’? Doesn’t exactly roll off the tongue like Google does. I highly doubt that anyone will be saying ‘Dude, I totally MSN-powered-by-Yahoo-searched my date last night’.

Their biggest problem is the ad platforms. It isn’t going to be as simple as Michael saying ‘they would simply be merged’. Well when you say it like that it’s only going to take 5 minutes. Any bumbling on their parts when and if they combine will only push Google higher.

Just remember who is pushing this deal. Microsoft made the offer, do you think they will back down and start using Yahoo’s technology for search, ads, or anything? They haven’t had an acquisition this size or this type (of course few have) and this is one where they can’t afford to lose a single user to Google. They change everything from Yahoo to MSN, they lose, they change MSN to Yahoo, they lose.

@#8….I think you’re right. Pending this deal, and give or take 5 years, but Yahoo is dead and relegated to footnote status. It’s sad, but Yahoo (apart from some killer acquisitions) hasn’t excited anyone for quite some time now. Doesn’t it just seem like the brand “Yahoo!” is dated? They roll out services and features with little or no buzz and no one seems to notice or care….or give them their just due as applicable.

@ Chris #11….One of the few services our company (based outside the US) uses every single day. Skype rates are approx. 3 times those of Yahoo Messenger to many countries. The other service is Yahoo Small Business website hosting and email service which I have highly recommended for years now.

Still, they won’t be able to beat Google.

Google is at the core of America, It is like the center around which Americans will revolve for information.

The merger etc are all management issues, not real hardcore programming.

Wouldn’t the FTC almost certainly require that MSN/Yahoo divest certain services as a condition for the approval of their merger? And, if so, which ones? I think mail comes up as the most obvious service, and certainly I think that would be something Microsoft would be okay with. More problematic would be the search engines. Quality or not, yahoo and msn are the #2 and #3 search engines, with ask a rather weak #4, so a merger would effectively turn the search engine market into a duopoly, something the Feds might not be too crazy about. I know some people think that MSN + Yahoo equal more competition for Google, and in some areas - advertising - that’s probably true, but in terms of competing via search enging quality, I doubt it.

as long as they get rid of live search. I dont care how much money they put into that, its still a piece of shit. Very crappy search results compared to google and even yahoo

Microslog just cant wait to snuff Yahoo and all the open source software Yahoo has incubated. They will simply pull the plug. When you cant beat a competitor, you buy them and shut them down.

The current trend of big software business is to try and buy up what open source operations they can and shut them down, or geld them.

EVIL is as EVIL does

Damn, just collaborate on the advertising stuff (create a joint venture that manages ads on yahoo and msn/live) and stay separate companies.

And if you really want to, develop a unified search technology, too. This could be a joint venture, too.

Monetization and search - this is what this acquisition is about, the remaining parts could easily stay separate. (MSN isn’t a small property, it’s just poorly monetized!)

If it happens this would be a great opportunity for the new Microhoo! to leap-frog google and create an Information coscious Environment. The pieces are there but can they put them together?

This is great analysis. I haven’t seen this perspective anywhere else on the web, everyone else is just talking stock price and antitrust. Nice work.

No matter Yahoo Search or Live Search, I would still preferred Google Search. No matter Yahoo Mail or Hotmail, I would still preferred Gmail.

>Live Search to replace Yahoo Search on Yahoo.
Huge mistake. I think you’re dead on that will happen, and that will be a huge mistake from the MS people.

Wow, so my favorite website, delicious, would fall in the hands of Microsoft? That’d be messed up. I’ve been trying to dodge any Microsoft services, software or hardware for years. Switched to OSX. I almost made it. Now this.

There is something with my fingers… whatever I do… my fingers automatically type google.com

it’s just the way I am.

There is no way AdCenter will replace Panama. While there is a lot of hue and cry over Adcenter, internally - we all know that that the talent at adcenter team is one of the worst. They need to be disbanded !

I think that with regard to Delicious and Flickr, it’s important to note John Gruber’s observation (http://daringfireball.net/2008/02/microsoft_yahoo) about what happened when MS bought Hotmail. The entire system was converted to Windows-based solutions on the back end at great cost. Flickr and Delicious run on open source software. Does it make more sense to port them to MS technologies or sell them off? I’m hoping they get sold. If those two services get rolled into the MS hegemony, I–and may other people I know–will stop using them.

This is how I see it.

Yahoo will get the branding Yahoo! Live!.

Most things will just stay the way they are for a year or so.

During that year, MS will slowly begin to eliminate and merge Yahoo! services.

After 1-2 years, Yahoo! will barely exist.

Thats assuming that the FTC will allow MS to buy Yahoo!. I personally think it would give them a monopoly in the search engine department, and the FTC wont allow it.

Flickr Live imitating Picassa? You gotta be kidding.

If anything Picassa should be imitating Flickr, what I can imagine, and gives me the goosebumps, is the integration between the windows explorer and flickr.

Imagine giving you the possibility of right clicking on any picture on your windows explorer and having the option to “Flickr this picture(s)”

Flickr would be without a doubt the biggest picture site on earth

I’d like to see some numbers on customer loyalty and opinions of Microsoft’s products vs Yahoo’s among active users. Despite the similarities in reach, keep in mind that MSFT sets the default start page of IE, whereas Yahoo isn’t anybody default start page. Thus, Yahoo users migrated more voluntarily and consciously than MSN and Live users did.

Yahoo! has a stronger brand among the properties MSFT would be buying them for, regardless of who has better products or more users. The real problem is that both companies haven’t been particularly good with strategy, cohesion, and thinking ahead for a while, and putting more me-too services under one roof will most likely result in lots of confusion.

I’ve seen regular Yahoo users’ reactions to Yahoo Photos disappearing and being half-assedly absorbed into Flickr. They’re confused. Then there’s 360, which was never tied into the other Y! services very well. I think that’s inexcusable - Y! already had user profiles in the millions, but their search/discovery mechanisms were always broken (search for a specific interest - one word - will occasionally get you thousands of irrelevant profiles in other languages!)… They’ve had a potential Myspace or Facebook sitting under their noses for ten years with no action. MSFT’s answer to that issue was to buy a tiny stake in Facebook… and now Yahoo is working on ANOTHER social network product. If MSFT buys Yahoo!, they’d have the stake in Facebook plus Mash or Mosh or whatever it’s called to worry about as well.

Basically, both are still gigantic companies with a ton of market power, but they’re mostly treading water with market positions they earned years ago. The few exceptions to this (X360, Flickr for instance) are outliers.

“ALL NEW (HYBRID) DIGITAL MEGA MUSIC STORE, COMING EARLY 2008″
-Sound Beast Digital Music

http://WWW.SOUNDBEAST.NET
http://WWW.SOUNDBEAST.NET

Y! Games does not have a longer history than MSFT Games.

MSFT Games was #1 when Y! Games launched, it took us about 6 months to pass them in users.

It would suck for online users everywhere if this deal goes through. Y! can’t help MSFT much and MSFT can’t solve the problems Y! has.

Y! needs to have massive layoffs 4-5 K, make a few smart small buys, leverage the passion of the start up staff they get in the buys. There’s too few people at Y! now that understand moving fast and lean and winning.

44.600.000.000,- $ or approx. 10 times 2007 Gross Profit or 67 times 2007 Net Income! The right name will be:

Microsoft and Yahoo = MYCRASHOOFT
- - - - -
I don´t have to explain MY CRASH. OOFT is refered to as: Used when one is impressed by something; when a person is taken back by something.

This is a idiotic deal. Microsoft will become a extremely confused behometh that wont be able to innovate because their so confused. The problem with Microsoft is that theyre too big, and now theyll just get bigger.

@9 Miguel, @35 Tinkwater: this will come as a shock, but MS will most certainly keep the open-source components around. The credibility gain this provides for MS in the open-source crowd, simply by keeping those programs alive, is big.

In spite of all the historical rhetoric, times are changing in Redmond. Take a look at http://port25.technet.com/ as an example. It’s not huge or the most influential group at MS, but MS is not afraid to interact with the open-source community.

Mark my words: five years from now, everyone will be talking about the monopolistic industry behemoth that uses open-source software for its own gain, but never gives anything of substance back to the community. Except we’ll be talking about the empire in Palo Alto, not Redmond.

@38 - Search Engine Land did it before TC:
http://searchengineland.com/080201-094751.php

Yahoo’s search product has been an excellent product, and it has a brand that is a huge reason why it beats Microsoft in search share in the US by double the share. Kill that brand? No way. Live Search powered by Yahoo is far more likely.

And kill Yahoo Search Marketing? When it probably has more advertisers in it than the still fledgling adCenter. I think you’re making the wrong call there. YSM might get renamed adCenter, but I’d expect that the YSM Panama platform remains, with adCenter features added into it to prevent the most advertisers from having to go through platform trauma.

I don’t know but I expect to see some improvements. I have opted for Google lately because of greater precision in search results. Wonder if Google is worried about the potential coming changes.

I see both brands staying. It really doesn’t take much effort to rebrand technology. From a consumer point of view I don’t think you will see any changes immediately. What will change is the backend - gradually moving to Microsoft datacenters. This can take a long time and a lot of effort. Look how long it took to convert Hotmail from its original Linux servers.

Some immediate casualities may include the Flash Toolkit for Yahoo sites. This would probably quickly become a Silverlight Toolkit.

Up until the Windows 7 release it may be to MS’s advantage to leave the sites as distinct entities. This will give WIndows 7 users a choice of services right out of the gate and other online services no choice but to the implement the same protocols.

Guys,

From an advertiser perspective, adCenter and Panama interfaces are vastly inferior to AdWords (okay, they’ve both improved, but you won’t meet a high dollar advertiser who prefers usings one of them more than AdWords). Perhaps with combined R&D they can come up with something approximating AdWords…but it’s not just a matter of getting one of these back-end systems more exposure. There are significant gaps in basics capabilities, upload time, notifications and reporting.

Do the VCs and Wantrepreneurs reading TC realize that THE Danny Sullivan is gracing this comment section with original search engine analysis? This thread is HOT.

I like Yahoo! over Live search especially the way Yahoo! quickly gets to list new sites in their search engine.

The post mentioned Yahoo7 vs Ninemsn in Australia. Interestingly Yahoo registered yahoo9.com.au in October last year. Were their discussions back then? I agree with Michael (#3), they will not drop brands up front.

I hope we see some tighter integration. I’d love for my Windows Live Messenger contacts to be able to see my Flickr photos and del.icio.us links right in the app.

No discussion yet of Yahoo Finance versus Microsoft/MSN Money. This is a tricky one because Yahoo Finance is a strong brand, while the Microsoft Money application is tied up with MSN Money.

While it makes sense to combine the MSN and Yahoo online presence, both brands have really failed in implementing more Web 2.0 initiatives that really drive traffic. Yahoo and MSN really need new branding initiatives.

At the same time, with Microsoft’s weight, Yahoo’s ads could actually become something to compete with Google adwords.

-Ray
Bismuth Finance
http://bismuthfinance.com

Son of Softbank will outbid Microsoft, so we don’t have to worry about any of this.

I suppose that Bill Gates is the only man in the world, who, after founding a company, gives this name: MicroSoft

every other men would call this company: HugeHard

Great comparison Duncan. I agree with many of your hypotheses, especially on the front page and unified ID system. It will be interesting to see what happens. I agree with xoost in that this is a sad day for Yahoo.

Lots of great input… but I got tired of reading them after #35 mostly because I had something to say.

#15 Darren is right. The merger will be very slow. No doubt the board will want oversight at each product merge that will take place. Because very power products are being killed.

But the biggest questions came where users are involved. Will every single Yahoo user know they have access to msn services or will they still continue to make msn and yahoo accounts? What will happen when two similar products that each have gone under brutal investments must merge? What will happen to my flickr, delicious, and msn photos/favorites? Any cross migration likely to take place? How about visual interface choices?

Let’s just say there is about to be some reinvesting done at all levels here just for a more heartful merge. Lots of questions will have to be answered.

Lots of great input… but I got tired of reading them after #35 mostly because I had something to say.

#15 Darren is right. The merger will be very slow. No doubt the board will want oversight at each product merge that will take place. Because very power products are being killed.

But the biggest questions came where users are involved. Will every single Yahoo user know they have access to msn services or will they still continue to make msn and yahoo accounts? What will happen when two similar products that each have gone under brutal investments must merge? What will happen to my flickr, delicious, and msn photos/favorites? Any cross migration likely to take place? How about visual interface choices?

Let’s just say there is about to be some reinvesting done at all levels here just for a more heartful merge. Lots of questions will have to be answered.

And one more thing, this is the end of microsoft being a one man show. Openness must transcend for this to succeed.

So, that’s 2x the same, except the last paragraph.

Microsoft needs Yahoo to survive!

http://tinyurl.com/2hattk

Sach: You are definitely correct. Microsoft badly needs Yahoo to survive. The Internet and personal computing are rapidly moving in that direction. FYI, I blogged about that very issue here: http://twooh.blogspot.com/2008.....oogle.html.

“Conclusion: Microsoft adCenter will win the day”

Adcenter is a bad user experience. I work with all 3 platforms daily. Panama is actually a pretty good product. Not perfect, but it’s a HUGE step up from Adcenter. But with Microsoft managing it? I’m not so sure. And if they do decide to stick with Adcenter as the main platform…. wow.

This buyout’s gonna slow down development at MS and Yahoo. Google’s gonna be the big winner.

Before going product by product you need to start with some higher level calls.

Brand:
*What is the consumer facing brand? [transition to one brand -> Yahoo!]
*What is the advertiser & publisher facing brand? [transition to one brand --> AdCenter]

Business
*Do you want to be in the listings business (Personals, Jobs, etc.) — these are not businesses that play to the strengths of Microsoft.

Technology:
*Regardless of product brand you gotta go with the best technology or with the product with the most momentum.

Momentum winner:
1.) Live Search over Y! Search — which has stalled.
2.) Answers over Q&A

Clear cut winners:
1.) MSN Messenger is a far superior product then Y! Messenger
2.) Y! Mail is superior to Hotmail
3.) Live Maps over Y! Maps

YDrive (to combat GDrive) is a more precise message, than the confusions of, was that SkyDrive or LiveDrive or LiveFolders…etc?

microsoft is fucking stupid …. he help google to bring down 1 enemy ! Google is really smart !

It’s interesting that I’ve seen very little discussion of Yahoo! Groups and what will happen to that. As antiquated as the interface is — an updated beta version is under development — there are literally millions of groups in existence worldwide where group interaction via email is a way of life. A source of recurring traffic in so many niche markets should count for something.

Apropos the article’s logo in the title, check out this one: http://www.taadaam.com/index.php?t=YAHOO%21

cool

Frankly I do not care what will happen with those two together, as long as they leave Flickr alone as it is… otherwise they will be a lot of unhappy people around the world.

How about MS version of AJAX vs. YUI? If MS can keep those developers on the YUI platform from bailing, that would be a key win. Seems like it would be too tempting not to integrate, since it would be confusing to keep both. My guess would be that YUI would be largely kept.

And the infraestructure? Yahoo is a big user of PHP and FreeBSD (along with other FLOSS software), and have software licensed with YPL (Yahoo Public License). What would Microsoft do with these questions? Microsoft already have Ms-PL e Ms-RL but isn’t mature in open source partnership yet. What do you think Duncan?

Very “hypothetical” post….but great assumptions and intelligent remarks!

bookmarked @ http://livbit.com

Jesus Duncan, could you have pulled any more ridiculous crap out of your ass? Most of this is just garbage; please leave the analysis to people who have analytical skills and who understand the industry; i.e. not you, in case it wasn’t clear ;-).

And what about Kelkoo, the online comparison system of Yahoo!? It is powerful in Europe and no one has talked about it up to this moment.

Companies like RESCUECOM that have gone up against Google are happy to see the possibility of more competition in search and online ad placement. Who better to bring it than Microsoft? Google has used its power to trample trademarks by promoting the sales of a company’s trademarks to its competitors for ad placement. We hope a Yahoo backed by Microsoft offers operates with a business model that gives customers a fairer alternative.

It will most definitely be very interesting to see whether or not Microsoft has to sell off its MSN stake. When contrasting MSNBC to Yahoo News, they both have clear positives and negatives — some good complementary feature sets…

Read more here…
http://tpgblog.com/2008/02/14/.....improving/

And, Enjoy!

Jeremy Horn
The Product Guy
http://tpgblog.com