John Paczkowski

Recent Posts by John Paczkowski

Have Any News Without So Much Yacrosoft in It?

Well, Microsoft has certainly sucked the wind, and I mean all the wind, out of the news cycle today, hasn’t it? The company’s $44.6 billion offer to buy Yahoo is the talk of the tech world this afternoon. Here are a few tidbits pulled from the chatter:

  • Microsoft approached Yahoo after the company posted earnings and gave it two days to respond. Yahoo apparently missed that deadline, so Microsoft went public with its offer.
  • Other bidders may emerge before this all plays out. “This deal’s not going to get done at that price,” a Yahoo executive told BoomTown. “The reason Yahoo stock is so depressed is all about lack of leadership and not about potential. Microsoft is taking advantage of that.”
  • Microsoft obviously isn’t after Yahoo for its software. “Yahoo’s stuff is almost all written in PHP, and runs on FreeBSD and Red Hat Linux servers,” John Guber notes over at Daring Fireball. “I don’t think Microsoft has ever bought–and maintained–a significant software product that wasn’t written against Microsoft technology. E.g., when they bought Hotmail, the migration from FreeBSD/Apache to Windows 2000 was painful and difficult. Hotmail was just one product (albeit a popular one). Yahoo has hundreds of properties, several of them, I’m guessing, more popular than Hotmail was back in 2000. … My gut feeling is that Microsoft’s culture is the driving force here. I don’t think they care 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.”
  • In terms of search-market share, a combined Microsoft-Yahoo is more than 50% smaller than Google.
  • The Department of Justice is “interested” in reviewing the competitive effects of the proposed deal and will hold a hearing on it Feb. 8. Blair Levin, a former FCC chief of staff who’s now an analyst at Stifel Nicolaus, thinks the Feds won’t take issue with it. “The basic argument for the deal relies on how Google is growing its lead and that to compete, Microsoft and Yahoo need scale,” he wrote in a research note. “As part of that argument, we think the companies will point to the fact that Google will remain the leader in the market even after the transaction, and thus they will be able to argue that there will still be incentives for the combined companies to innovate.”
  • Jeff Chester, director of the Center for Digital Democracy, hopes the Feds will take issue with the deal. “Today’s proposed acquisition by Microsoft of Yahoo, if consummated, will create a powerful interactive Internet duopoly in online media,” Chester said. “Google and Microsoft will have inordinate power to shape the online communications marketplace, including journalism, entertainment and advertising. The once most potentially democratic of all mediums–the Net–is being shaped by the same powerful forces that consolidated the ‘older’ media of broadcasting and newspapers. There are consequences to democratic societies everywhere, as two digital gatekeepers are likely to control how the Internet and other interactive media evolve. In an era when individuals are increasingly conducting their personal, social and political lives online, the corporations that control the digital experience will have a far-reaching influence over every aspect of society.”

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There was a worry before I started this that I was going to burn every bridge I had. But I realize now that there are some bridges that are worth burning.

— Valleywag editor Sam Biddle