Yahoo Users Will Be Losers If Microsoft Gets Its Way
Yahoo users should be none too happy about Microsoft's $44.6 billion hostile bid, because they're likely to come out in last place if the deal goes through. Yahoo's services are completely alien and antithetical to Microsoft culture and technology, and acquisitions are virtually always bad news for the customers and users of the company being acquired.
Yahoo users should be none too happy about Microsoft's $44.6 billion hostile bid, because they're likely to come out in last place if the deal goes through. Yahoo's services are completely alien and antithetical to Microsoft culture and technology, and acquisitions are virtually always bad news for the customers and users of the company being acquired.John Gruber at Daring Fireball explains why Yahoo's technology is alien to Microsoft: Yahoo services are built on PHP, FreeBSD, and Red Hat Linux servers. Microsoft's history is that if it buys technology written with non-Microsoft tools, it converts the technology, as it did when it bought Hotmail and migrated it from FreeBSD/Apache to Windows 2000.
Migrating Hotmail to Microsoft technology was hard, and migrating Yahoo's services to Microsoft technology will prove even harder. It's likely Microsoft won't migrate the technology -- instead, they'll shut down the Yahoo services and migrate the users. Gruber explains: "I don't think [Microsoft cares] about any of Yahoo's technology, with the possible exception of Yahoo Search. What Microsoft sees in Yahoo isn't software but page views and advertisers. So rather than, say, rewriting Yahoo Mail using Windows technology, I expect them to just force Yahoo Mail users over to Windows Live Hotmail."
But that's not the only reason Yahoo users should be disappointed at the prospect of a Microsoft takeover. Acquisitions are virtually never good news for customers and users of the company being acquired; the best they can hope for is that they'll be no worse off than they were before. As for the worst they can hope for ... well, just ask users of Netscape about that. Or Jaiku. Or Digital Equipment Corp. Or Compaq.
Or consider AOL. That's a weird case, because AOL actually acquired Time-Warner, not the other way around. However, like some weird horror story where the meal eats away at the host from the inside, Time-Warner ended up on top in that deal. In the end, it was as if Time-Warner had acquired AOL, and AOL users suffered.
Or consider two companies Yahoo acquired: The del.icio.us bookmarking service and Flickr. Del.icio.us hasn't seen any significant improvements since the acquisition.
Is Flickr an exception to my rule? It's seen a couple of upgrades since Yahoo acquired it -- the ability to order prints online, for instance, and algorithms to use geotagging and keyword frequency to determine the most interesting photos being uploaded. But those upgrades aren't particularly interesting. Print-ordering is a pretty obvious service for a photo-sharing site to offer, about as revolutionary as a restaurant offering napkins. And finding the most interesting photos is more of a lab novelty than anything that people will actually use.
Louis's list of losers includes advertising agencies, which are going to be squeezed by not one but two giants.
As for me, my personal domain is hosted on Yahoo, even though the actual mail service is provided by Google Apps. I use Flickr, del.icio.us, Yahoo Groups, Yahoo Messenger, and probably other Yahoo services I can't remember at the moment because I take them for granted. I'm not happy about the deal, but I'm not unhappy, either; I look at this merger the way I look at the cancellation of a favorite TV show: Nothing lasts forever, and something just as good or better will be along soon.
Server Market SplitsvilleJust because the server market's in the doldrums doesn't mean innovation has ceased. Far from it -- server technology is enjoying the biggest renaissance since the dawn of x86 systems. But the primary driver is now service providers, not enterprises.