may 6, 2007

This is Mookie speaking as Mookie-the-individual.  This is not Mookie speaking as Mookie-the-Yahoo!-employee. I don't know any more than you all. So, don't go selling/buying stock because of what I say here. You have been warned. So, everyone I guess is aware of those rumors that Microsoft was in talks, then not in talks to buy up Yahoo!. That rumor has been circulating around for a while, each time it has been shot down -- and each time, someone has gotten very rich from it, since the rumor seems to drive up YHOO every time it comes around. I have my doubts that a Microsoft and Yahoo! combined entity would do any good. Why? Because #2 Yahoo! plus #3 Microsoft would still be a #2 MicroHoo! entity. The gap between Google and Yahoo! is pretty substantial, but the gap between Yahoo! and Microsoft? Even bigger. Putting together number two and three will not make much of a difference. Then you look at Microsoft's track record for internet properties. They have the dominate OS on the market. They play heavy-handed games because of this -- like setting the default search engine in Internet Explorer to their own and setting the default homepage to their own. Yet, look where they are at with all this cheating: A far distant number three. If Microsoft has the cards stacked up like this on their side -- with the OS domination and all -- and yet still can't do anything, what good would them buying up Yahoo! do? Nothing. They would only hinder Yahoo!. Here's how I see it. Microsoft is a packaged software company. That is what they are brilliant at doing (though lately, they have been pretty far off target). Their cash cows are Windows and Office. Everything they do has to benefit Windows and Office, period. Sell an Xbox 360? Gotta have a Windows tie-in somewhere (like Media Center). Sell a Zune? Gotta have it work only with Windows. But, what happens when Microsoft goes and tries to create an online version of Excel or Word? That will eat into their Office sales. No can do. What about moving applications that would only be Windows-based into an OS agnostic web browser? No can do. That would eat into their Windows sales -- come on, who would use Windows if you could do most of your stuff in a centralized location that can be accessed by any machine, anywhere in the world? So, what is Microsoft going to do? I am guessing that everything that happens in the MSN/Live division has to be run by the Windows/Office division -- since you can't have those online guys creating cool shit that will eat the lunch of the cash cow, right? Buying Yahoo! would only slow down Yahoo! (and, my guess only, drive us Unix-loving Yahoo! talent over to Google). No, buying Yahoo!, especially now that we have Panama up and running, is not the thing that Microsoft should do. What Microsoft should do, getting in my now famous CEO armchair, is spin off MSN/Live. Let that small company run itself without the hands of the Windows/Office division touching anything. Isolate the MSN/Live people and let them do what they want, feed them money and let them go. Don't worry about the cool stuff they create (and I have to admit, Live has some cool stuff like the Bird's Eye View on their maps). That is the only way. If the MSN/Live group continues to be handicapped by the Windows/Office group, Microsoft should just sell off the MSN/Live group. Will this ever happen? Hell no. I can't see Microsoft spinning off MSN/Live anytime soon.  And that is unfortunate for them since I can't even see Microsoft letting the MSN/Live group go and do their own thing without the heavy hand of the Windows/Office group pressuring them.  What is even more unfortunate is that the whole Windows/Office monopoly is coming to a slow death. There are great alternatives out there: Mac and Linux. Power-users find Linux better because it is free -- free of charges for the most part and free of having to be treated like a criminal when installing it. Linux is open, reliable, safe, and does all that a geek needs to do.  Home-users are finding that Macs are better because they are easier to use, more reliable, and more fun. Changing the course of a large company like Microsoft is like trying to turn the Titanic. I know this because I worked for a large company like Microsoft:  Sony. And when I was at Sony, they were trying hard to steer that massive ship in a different direction. It wasn't happening though. So, my edumacated guess is that it will be a while before Microsoft changes its ways. But, the question is: Will it be too late for them?

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