OK... Loved this Microsoft Watch column about Yahoo rejecting the Microsoft bid...
Yahoo Squeaks, Microsoft Squawks
They say trapped animals fight more fiercely. But what happens when two animals are cornered?
Microsoft's unsolicited—and unwanted—$44.6 billion bid backed Yahoo into a place from which there was seemingly no escape. But rather than die, Yahoo is fighting back. Earlier today, Yahoo rejected Microsoft's offer.
Microsoft feels cornered, too, but by Google. Microsoft sees no escape without Yahoo, and the company will fight fiercely to get its prey. From Microsoft's perspective, there are two losers without the merger. Yahoo must die so that Microsoft will survive.
So, it is no surprise that Microsoft is fighting back too. After U.S. stock markets closed, Microsoft issued a rather long response to Yahoo, but more to shareholders than to the board of directors. Microsoft's strategy now will be divide and conquer, to rally a mutiny among Yahoo's ranks.
As I pretty much expected, Microsoft has decided to push on with its Yahoo bid. Based on the market's reaction over the last two weeks, you'd think that Microsoft would have found some way to spin it so that they could step away and perhaps regain that $40 billion market cap hit that they took in their stock. But I think ego and testosterone is making the decisions now.
There will be two losers from any hostile takeover. Then Google will take everything else. Not that it really matters. Microsoft's bid, assuming that it is sincere, reveals that the services platform is vaporware. Sure, Microsoft has built out something, but it's not nearly enough to compete with Google. Microsoft has tacitly admitted that it's even farther behind Google than anyone suspected. Surely Google can smell that blood. Yum!
This is the thing that surprises me... If you listen to the company spin, Microsoft's Live offerings will be the biggest driver in the company's portfolio in the next few years. But there's nothing to indicate that now. We've been told how many times that MSN Search is *the* critical driver for Microsoft, and that they will be the dominant player? But yet no one seems to question that they are now looking at spending over $44 billion dollars to become a distant second. FAIL?
Ah, but my favorite part is Wilcox's parting line...
Microsoft's Yahoo takeover is now unequivocally hostile. Today, the companies gave each other an upraised middle finger. Each has one hand still free. There's another birdie coming.
Even if Yahoo is successful in fending off Microsoft (and that's a *big* if), I wonder how much of a hit they've taken with people migrating away from their services based on users not wanting anything to do with Microsoft. I know I've started that move, and there'll be no reason to go back regardless of how it turns out. Home page portals, email, instant messaging... I can get those commodities anywhere, and in fact already have non-Yahoo alternatives that I've given more weight to. Flickr is about the only Yahoo property that I feel still has value due to critical user mass and quality of service. I'm not sure that "MSN Flickr Live" wouldn't kill that off too...