In case you were concerned about me, I didn't miss yesterday's news about the proposed Microsoft takeover of my Sunnyvale neighbor, Yahoo!. I just felt that with everyone on the planet, and some in other planets, for sure, talking about it, I'd not only be lost in the noise, but seen as a me-too blogger, which I'm trying to avoid. But we saw it. And we think it'd be a mess.(Peek at TechMeme for yesterday's million headlines)
Microsoft's goals with a Yahoo! acquisition are clear - try to become relevant in the Web space, including search and social networking. The company saw Yahoo!'s recent dysfunction and hoped to get the company on the cheap, while taking on Google in a more aggressive way. But this won't help their position against the competition, and may actually make the situation worse.
But, if you're Google, a Microsoft-Yahoo! alliance is just about the best thing that ever happened to you. It would combine two of the most confused and unfocused competitors you have, guarantees months to years of integration issues and slowed product development, concern about layoffs and jockeying for position amid increased political infighting. It wouldn't promise improved innovation and technology that would threaten your leadership, but instead take two companies with varying cultures and ask them to beat you together, where individually, they have failed.
If you're Apple, you see Microsoft aligning with Yahoo!, making Google more likely to align with you, which can only be good. You see the company who designed the Zune hook up with the company whose Yahoo! Music offerings went absolutely nowhere. You hope the company keeps making Mac Office, but you've got two backup plans, with your iWork suite, and Google Office.
While Yahoo! once had the leadership position on the Web, and still leads in a few areas, including population on Yahoo! Mail, and a good portion of the portal space, they've fallen behind everywhere else, the exceptions being their smart acquisitions of Web companies like Flickr, MyBlogLog and Del.icio.us. Microsoft never could get there, and while they still own the world's most popular and most hated browser, in Internet Explorer, they've had very little success anywhere else. Even their massive acquisition of Hotmail has turned out to be an unrespected joke.
A Microsoft and Yahoo! combo would have the world's most popular operating system, and the world's most popular office application suite. You could presumably layer on top of that Yahoo!'s widgets, acquired from Konfabulator. You could then integrate Outlook with Yahoo! Mail, and combine MSN search and portal efforts with those of Yahoo!, but just look at what's happened with all the other search acquisitions on Yahoo!'s side: Alta Vista, Inktomi, and Overture, for starters.... have they made Yahoo! better and more popular than Google? No.
A Microsoft/Yahoo! merger would take two tech titans, remove one, and make the combined offering less successful and less innovative than the combined efforts of the original. It'd give Google a free pass and extend their head start. It'd eliminate thousands of overlapping jobs, and send many smart folks out on the street or off to new start-ups. But if Yahoo! knows what's good for it, it'll reject the underpowered Microsoft offer outright, tell Ballmer to pound sand, and take a renewed effort toward integrating its own services and competing aggressively in the market. I just hope they're smart enough to say "No Deal".