So what do I think about the MicroHoo announcement?
I'm doing this more for the humor of looking back five years from now and either being 1) impressed by my own wisdom, or 2) amused by my total stupidity.
First off, I've read more than enough business books to know this... there is NO way to tell right now how this will play out. The people who claim that this will propel Microsoft past Google have just as much credibility as those who are saying that this will be the death of Microsoft *and* Yahoo. Books and articles will be written two to three years from now, and every decision made between now and then will be given a far greater level of importance and meaning than it had at the time. Hindsight is 20/20. Look how many people were fooled/were wrong about Enron. :)
Having gotten that caveat out of the way...
Personally, I see this as a huge risk for Microsoft. While it does give them a large infrastructure and content, it also presents problems on branding. Does Yahoo mail cease to exist? Yahoo Instant Messenger? Do those people who chose Yahoo-branded products over Microsoft stay the course, or do they jump over to Google (or other alternatives) because they didn't want to use Microsoft stuff to begin with? Will Microsoft be smart enough to leave successes like Flickr alone, or will they attempt to rebrand and control it to be another forgettable entry in the list of "Live" offerings?
As an IT guy, I'm *really* curious to see how they'll handle the culture and infrastructure issues. While Google has "out-Yahoo'd" Yahoo in terms of working environments, Yahoo still has that free and independent spirit. Microsoft used to have it, but that was long, long ago. How will Yahoo talent react to the process-heavy Microsoft management style? Or, given the deteriorating economy, will people just be happy to still have a job? And just how many people will be laid off from various areas of Yahoo and Microsoft as the integration process begins? Will Yahoo's long-time support for open source/open standards become support for *Microsoft's* version of source/standards? Or will Microsoft finally have to admit that there are more platforms than Windows, and they should start using them?
Finally, is this a purchase to compete in the race that's in the rear view mirror, or an attempt to shape and define where things are going from here? Paying $44 billion to become a somewhat close second in monthly search engine stats is rather steep. I know the Microsoft press machine will say that this purchase will propel them to new ideas and areas of leadership, blah, blah, blah. And Bill Gates tells us every year that the paperless office is right there on the horizon... Telling the market where things will go, and getting them to actually go there are two entirely different things.
If I had to make a general statement of success or failure, I'd tend to place money more towards the failure side. Major acquisitions are notorious for delivering less than promised (AOL/Time Warner, anyone?), and I don't think that MicroHoo will be any different. It *does* change the landscape, and it *does* mean that Google has a lot more competition. But whether Microsoft can successfully take that change and build on it is still up for discussion. Things like XBox and IPTV haven't exactly become revenue streams to be proud of. And now with $44 billion less on the balance sheet, the room to support money pits for long periods of time may be at an end.