It’s been widely reported that Microsoft has offered $44.6 billion to acquire Yahoo! Inc., which comes to around $1500 per user of Yahoo!. It’s evident that they are doing so in order to compete with Google’s rising (56%) share of search queries. But don’t let Microsoft do it! It will be the downfall of Yahoo! and will negatively impact many people.
How many times have we seen Microsoft do questionable things? Here are some of the likely things to happen if and when Microsoft purchases Yahoo!:
- Yahoo! products to disappear:
- Yahoo! Messenger (to be replaced with Windows Live Messenger)
- Yahoo! ID and plans for OpenID (to be replaced with Windows Live ID)
- Personals (to be replaced with Windows Live Spaces)
- Maps
- Yahoo! Widgets
- Mozilla Firefox Yahoo! Edition
- Music Jukebox (to be replaced with some form of Windows Media Player / Zune Marketplace)
- All the Yahoo! toolbars (to be replaced with some form of the Windows Live Toolbar)
- MSN and Yahoo! merge into some sort of weird portal
- Yahoo! Publisher Network becomes an active competitor to AdSense (and accepts publishers outside the U.S.)
- Yahoo! Mail loses the “unlimited” storage and the interface changes
Doesn’t it seem a tiny bit anticompetitive if Microsoft eliminates the Yahoo! products that would have competed with the Windows Live products, and forces those users to switch to the Microsoft products? This simply consolidates the users into one group of people locked into Microsoft products.
Clearly, Yahoo! has created a great deal of services that compete directly with Microsoft: Yahoo! Messenger, Yahoo! ID, Maps, Mozilla Firefox Yahoo! Edition, and the Yahoo! Toolbar… even Yahoo! Mail. Does it not seem likely that Microsoft will favour its own products over those of Yahoo!, despite the strong Yahoo! brand?
We will see hundreds of thousands of dissatisfied users. They have remained dedicated to Yahoo! products for its strong brand, some of the reputable features in its services, and also for its willingness to help open source — as demonstrated in the Yahoo! Developer Network as well as some of its open API’s.
It is good that Google will have competition, but not when the opposition is Microsoft. In such circumstances, we will not see benefits for the users — only more hooks to “lock” the users in.
TechCrunch also has an article on this, but is more specific about some of the changes, although I seem to disagree with some of them. For instance, I do not believe that Live Search will replace Yahoo! Search — rather, I feel that they will merge into one. Hopefully, they’ll come up with a better name than Yahoo! Live Search. TechCrunch also mentions that it’s possible for Flickr to integrate with Windows Live, or to offer a Picasa-competing download.
TechBlog mentions that this purchase will need to be approved by various regulating agencies, and that would include the Justice Department. Quite obviously, this hostile purchase is intended to crush a competitor, Google, and given the history that Microsoft has in antitrust, we can probably expect some trouble from the E.U., where corruption isn’t an issue. (I’m not saying it is for the U.S., but Microsoft does pay a great deal of money to the government — can we really trust an entity that contributes so significantly to the U.S. economy, which is heading into recession?) This issue will create an uphill battle for Microsoft.
But there are others, who feel that such a purchase or merger will be very beneficial for bloggers, the Internet, and even Google. The argument is that this sort of action does increase competition (agreed), and that will allow cheaper search engine advertising, push Google to improve its services even more, and allow third parties such as bloggers to earn a higher revenue share from programs like AdSense. Respectfully, I understand this view, but it has to be seen that this power that Microsoft-Yahoo! would have can be abused, and it’s quite possible we’ll see the decline of Google services like AdSense.
Some people, including John C. Dvorak, previously mentioned for his Tech5 podcast, do feel that this purchase won’t go through. Clearly, the European Union has dealt with Microsoft before, and Microsoft has not yet won a major fight in its courts. Hopefully, this is the case and Microsoft’s attempt is crushed.
What do you think? Should we let this happen? Should the European Union allow Microsoft to take such drastic measures? I don’t think so. What about you?
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