What To Do If You’re Microsoft Or Yahoo?

    May 30, 2008
    WebProNews Staff

Some high-powered tech industry professionals have suggestions for the two companies, whose inability to make some kind of deal left the tech industry wondering why they could not reach some kind of accord.

A round of Guitar Hero may have helped Steve Ballmer and Jerry Yang break the ice and bond a little bit, as Reuters noted the CEO of the rockin’ game’s maker, Activision, suggested. Bobby Kotick, a Yahoo board member along with running Activision, made the suggestion.

Too bad Yahoo’s Yang and Microsoft’s Ballmer didn’t decide to let their CEO hair down and thrash some mad riffs. Ballmer could have thundered through Black Sabbath’s Ozzy-era back catalog, while Yang shoegazed his way around a Lemonheads’ retrospective.

Humor and dropped tunings aside, Microsoft and Yahoo both appear to possess a vested interest in forging a stronger number two competitor to Google in the search market. What they have lacked since the end of January is the ability to capitalize on that interest.

The failed talks drew the attention of the highest levels of the business world. News Corp magnate Rupert Murdoch weighed in at the All Things D conference about being mystified at the lack of accord between the two companies.

Barry Diller, himself at the center of controversy over the direction and ownership of a proposed breakup of his IAC properties, chastised Microsoft for not doing whatever it took to win the Yahoo deal. Microsoft walked away from the table in the face of a $37 per share demand from Yahoo; when it was thought a $34 to $35 price would have wrapped up the negotiations.

Google continues to entrench itself in the high 60 percent range of the US search market. A unified Microsoft-Yahoo might comprise a third of the search share, still far away from Google’s lead. But it would be closer than today’s status quo, and the competition should be good for consumers as the companies each attempt to outdo the other in serving search customers best.