What Makes a Yahoo Acquisition Interesting for Microsoft?

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OK, everyone is already talking about Microsoft buying Yahoo.

But what I find interesting is that Bill Gates is out and now Ray Ozzie is roaring. Microsoft has been so damn boring since I left in June of 2006. This shoots the boring in the head.

Why is “Microhoo” not boring?

No, not my pet service Flickr. But, damn, Gates could have bought that for $40 million. Instead Ray and Kevin had to spend billions. Wow. Nah, what makes Yahoo/Microsoft interesting is the email audience. That’s another 300 million people to add to Hotmail’s audience of close to the same. Yahoo has a ton of interesting Web properties that are far more interesting than anything Microsoft has done lately. Groups. Finance. Upcoming. Etc.

This gets Microsoft back into the Web game in a big way and puts a defense around Microsoft’s Office cash-generating-machine. I bet that some of Yahoo’s smartest engineers get moved over to the Office team to help build an online Office that’ll keep Google’s docs and spreadsheets from getting major marketshare inroads.

It’s the fear that Google’s Docs and Spreadsheets might someday take marketshare away from Office that I think was driving this deal.

Sad thing? I still own Microsoft stock, which went down today on the news. But I think that long-term this is a good deal for Microsoft’s shareholders too. With one caveat: Microsoft and Yahoo employees need to work together to create value, not destroy it. That’s going to be pretty tough since the cultures of the two companies aren’t a total fit.

Both companies also have lots of fat that can be cut, so it’ll be interesting to see whether Microsoft keeps the fat around (on both sides, as they have done so far) or if they cut back to make both companies together leaner and meaner.

Microsoft has a world-class advertising sales team and this gives that team a ton of new inventory to sell.

Anyway, this is what happens when a blogger tries to get some sleep: the entire world changes and he misses the boat. :-)


What Makes a Yahoo Acquisition Interesting for Microsoft?
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