Why Microsoft taking over Yahoo could be a good thing

Microsoft Yahoo

Microsoft has been seen for many as the evil of the IT Industry. Its dominance in many of the markets is undeniable – from Operating Systems, Office software to Game Consoles, the company has come a long way since making QBasic for IBM.

In the last few years we have also seen the emergence of Google – what started as a reasonably simple search engine service now expands way beyond that. Google was long seen as the good guy to Microsoft’s corporate whore but times have changed and Google has now an expanded set of services which makes some think it’s also going the same way as MS.

In the meantime, Yahoo, who like Google started with search engine services, have rapidly expanded their business through acquisitions and strategies, bringing a wealth of services such as Yahoo Messenger, Yahoo Shopping and Flickr to name but a few. Now that news has hit that Microsoft is targeting Yahoo as an acquisition, some are wondering what this means for the market.

Microsoft needs to expand its’ business far more than it has in the last few years; equally Yahoo has started to become stagnant and recently announced 1,000 job layoff in restructuring. Meanwhile Google has been an unstoppable train that’s just getting bigger and bigger. With all that in mind, I think this merger/buyout would benefit many people – not just the Yahoo shareholders.

Yahoo has invested in some niche markets which Microsoft has largely avoided – (Flickr, Yahoo!UI), whilst Microsoft has the lead in OS/, Office, development languages and game consoles, but needs to build out it’s services more. With Yahoo in tow, I think MS could blend it’s Photosynth product with Flickr for starters. Imagine taking photos from your trip and merging them in some interactive experience with other people’s photographs to create a 3D type experience.

Without this combination of services, Google poses a significant threat to Microsoft and its’ market dominance – Google seems to have limitless capital to invest in new and improved services – look at Google Maps, GMail, Search, etc – they’re all market leaders that just continue to build more and more great functionality which MS/Yahoo find hard to compete against.

There is an outside player which I am interested to see how this pans out – Adobe. They’ve made some great products such as Photoshop, Premier, Flex, Flash, etc. These products are largely complementary to MS and Google – both would do well to incorporate Adobe products in their own product line… I predict Adobe WILL either be in the news before 2008 is out – either buying-out another company or being bought out…

LINK – Quick overview of MS and Yahoo services

UPDATE – More on this subject on a more recent post >

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4 thoughts on “Why Microsoft taking over Yahoo could be a good thing

  1. I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you.

    Allen Taylor

  2. Microsoft locked me out of Hotmail because I have a Linux OS system. I went to Yahoo because they are Linux friendly. If Microsoft takes over Yahoo, I will be pissed off.

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