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Will the Microsoft/Yahoo merger lead to innovation?

Is it just me or does the Microsoft/Yahoo merger stand to foster a lot of innovation on the Web by driving away many of the smartest people at Yahoo and perhaps even some of the smart people at Microsoft? How many startups will be created by former employees of those companies, and how many startups will hire key staff members from the legions of disaffected Yahoos? If you worked on a project at MSN that is trying to catch up with a similar property already provided by Yahoo, wouldn’t you be thinking it may be time to start looking for other opportunities?

The greatest value of this merger may be in the chaos it generates.

4 Comments

  1. well, Google is getting into the act too. somehow, a merger of Google and Yahoo would just leave me feeling that web entropy (or at least options) had declined. will be interesting to see what happens…

  2. I don’t know what to think of the deal yet, because there’s so much going on here. The key problem for Yahoo overall is that they have lost the search battle entirely and even though their search engine is pretty good now – as an experiment I switched the search box at home to use it and it gave results pretty much indistinguishable from Google, although something in the UI is still a bit “off” – they’re probably never going to regain that share.

    And that leads to the real problem which is that Yahoo is competing directly with Google for talent and Google has much, much deeper pockets in terms of cash salary and it also looks to have more upside potential in the stock – stock options at Yahoo, after all, probably don’t seem very exciting when it’s stagnated for a long time.

    And yet, Yahoo does have a bunch of talented people still. But what they build doesn’t seem to be integrated into a Yahoo whole – and it’s not Google has done a great job on this, historically, but they’re doing it better than Yahoo.

    I mean, Yahoo’s crown jewel in terms of UI and community is probably Flickr, but there are no links to Flickr from yahoo.com (which, by the way, I haven’t typed into a location bar in years; the same is not true of google.com of course). So Yahoo makes no effort to promote the best photo-sharing site even though they own it. What’s up with that?

    There’s a toolbar of crappy-looking pixelart icons on the left side of their portal page, but all to generic services, nothing with its own recognizable brand image like Gmail (or again, Flickr). It’s like buying store-brand cornflakes.

    So the question is, can Microsoft fix any of that? From looking at their own problems getting any visibility for their online projects, I’d say the answer is “no”. And their dogmatic line on open-source would probably be disastrous for Yahoo – I suspect one of the reasons Yahoo has been able to hold onto talent is that they get to continue working on open-source projects, for instance.

    Sadly Yahoo is not the dynamic little web startup it used to be, otherwise I’d think there was some chance of transforming Microsoft from the inside like some horrible parasite that takes over its host. But now they’re a management-bound web sloth that has similar problems to Microsoft in getting any momentum. So this is more like, um, hoping that a shotgun wedding of two alcoholics will miraculously turn out one clean & sober couple. OK, that’s a terrible analogy. I apologize.

  3. There will surely be a number of people who take a payout and decide to venture out on their own. The prevailing assumption seems to be that everyone at Yahoo wants to stay there as part of an independant Yahoo. Microsoft may not be a bad place for Yahoo employees. Microsoft, Cisco and others have turned a corner realizing that acquired businesses often need to retain much of their original culture. Teaming with Microsoft gives them potentially deeper financial and innovation pockets. Many of those talented people want to see their efforts pay off. Microsoft could be the right partner to make that happen.

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