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WWD Debate: Microsoft Wants Yahoo, What do Web Workers Get?

Editor’s Note: There’s no question that Microsoft’s bid for Yahoo is game-changing in the tech world. But how does it affect us? WWD writers Mike Gunderloy and Bob Walsh see different sides of the same coin, speculating on the potential impact on the individual web worker and independent developer.

Mike Gunderloy: So, you start it off: what’s the upside?

Bob Walsh: Well, I see three major benefits to web workers if this deal goes through: Google gets some real competition, Microsoft gets a big dose of Open Source culture and flickr and get some innovation. First off, as much as I like Google – both as a web user and a microISV – they’ve had it way too easy for way too long. Having a real competitor – not just Microsoft’s currently lame efforts – would bring some much needed focus to the company.

Mike: Competition for Google would be a good thing, I agree: the sheer domination of Google is starting to make people doubt their “don’t be evil” mantra. But can you combine two also-rans in the search market to make a serious competitor? And there’s more to competition than size: innovation is what we’ve been missing from #2 and #3 in this market. I see more search innovation in small companies than I do in either Microsoft or Yahoo.

Bob: True enough about the competition coming from startups and microISVs – but what has Yahoo done with flickr and since they bought them? Not a thing. There’s a huge amount of potential in how we work, live, learn in the web still to find; Yahoo hasn’t been doing a thing in this regard.

Mike: So which web companies has Microsoft purchased and integrated well into its own operations? Hotmail, I suppose – but it took them years to improve it. And even there much of their effort was devoted to getting rid of a perfectly good infrastructure just because it was running on non-Windows servers.

Bob: True enough– but that was a decade ago. This is going to be a very good test if Microsoft has really changed. Will it actually try to move all of the Yahoo properties over to Windows Server 2008? Or will the “new Microsoft” leave well enough alone and concentrate of building up Yahoo?

Can Microsoft even make Yahoo search run on Windows servers?

Mike: Microsoft has a long history of making everything run on Windows – the question is how well it will run. Part of what I fear most in this combination – particularly for web workers – is Microsoft’s continuing antipathy to open source. We’ve heard many times about Microsoft developers not even being allowed to look at open source code, lest it taint their ability to patent things for the company, and we’ve seen a series of products come out of their developer division that are pale copies of open source originals. How can they possibly reconcile this continued “not invented here” stance with the open source culture that has increasingly been coming to the fore at Yahoo?

Yahoo itself runs on FreeBSD, same as HotMail did before the great rewrite. Merging that into Microsoft won’t be simple. I fear a Microsoft takeover would also kill further progress in things like the Yahoo UI and design pattern libraries, which have contributed quite a bit to the progress of Web 2.0.

Bob: Good points Mike – but the average consumer (not our readers, they’re not average!) think open source is something you put a bandage on – they have no conception (yet) of how Open Source has changed the developer community.

Is Ray Ozzie making the big technology decisions at Microsoft now or not? I don’t know. I do know this – both Flickr and are not exactly hotbeds of innovation any more.

Besides, no one has a problem with Microsoft having control of their non-public bookmarks and protected Flickr Pro photos, do they?

Mike: To their credit, Microsoft has consistently had some of the best privacy policies in the industry, and no serious breaches that I’m aware of.

What about branding? Can Microsoft possibly combine Yahoo! and Windows Live under one umbrella without hopelessly confusing things or alienating customers? Especially cutting-edge customers like our readers who are nimble enough to find competing services and switch instantly?

Bob: I don’t think Microsoft is going to be as foolhardy as to stick the two brands in a blender and see what happens. After all, they are buying Yahoo because they want eyeballs, not technology.

Mike: Yes, but if you look at their press release they claim they’re going to save a billion bucks a year through, among other things, eliminating redundancy. Can they possibly keep both Hotmail and Yahoo Mail? Windows Messenger and Yahoo IM? A wave of consolidation and rebranding seems inevitable – whether to all Windows or all Yahoo.

Given the visceral negative reactions that many people have to Microsoft, I wonder whether Yahoo might not be the better brand to keep.

Bob: Part of the issue is that Microsoft wants to buy the Yahoo that does searches and the one that’s a media company: Yahoo! Sports, Yahoo! Finance, Yahoo! Music, Yahoo! Movies, Yahoo! News, and Yahoo! Games. They are going to have to deal with a whole lot of media partners as well.

Online advertising – the media side of things + search advertising – is why Microsoft wants the Yahoo. If Microsoft moves too fast/far in absorbing Yahoo, they end up buying an empty building next to Highway 101.

Mike: Precisely. And that doesn’t bode well for the parts of Yahoo that are closest to the web worker world: the web development, flickr, and delicious pieces. Those are just sideshows if Microsoft is focused on search and ad dollars. The best we can hope for is for them to be spun off, the worst is for them to languish and die under their new Microsoft overlords.

So which side of the aisle do you fall on? Let’s continue the debate in the comments…

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14 Responses to “WWD Debate: Microsoft Wants Yahoo, What do Web Workers Get?”

  1. The only way for a winning formula from combining two half pace runners , is to create a faster sleeker result from the beggining and then dump the two originals through re-branding. Taking the best of both of these not so greats will still leave us with one still kinda good but could still be tons better for the money company. Innovation is the answer. Save your money and get popping on the next wave of tech advancement.

  2. My interest in the possible merger of Microsoft and Yahoo is both functional and financial. I used to use Yahoo, but Google is so much easier to use that I now use Google. Financially, I looked at Microsoft and Yahoo’s common stock prices and was shjocked to find Yahoo at $416/ share. Why doesn’t the board of Yahoo approve a stock split designed to bring more investor money into the company for use in making Yahoo more user friendly and thus counteract Microsoft’s merger offer?

  3. If this goes through, I see a number of things happening… 1) Yahoo properties begin slow and awful deaths as MS migrates them all to .net and 2) Yahoo developers desert en masse who then start new and exciting projects and are subsequently snapped up by Google

  4. Although Google needs some competition, I don’t think that it’s going to come from throwing two also-rans together to form a bigger loser. Neither Google or Microsoft seem to have the capacity for true innovation.

    When Google first broke onto the scene, AltaVista (remember them?) dominated search. Along came Google and their innovative search, and suddenly the search market was changed. Google itself will only be challenged by innovators just like they were. Those innovators are not going to be Microsoft, Yahoo, or Microhoo, unless there’s some drastic changes.