New Zealand Web Design

So it seems MS are prepping for a hostile take-over of Yahoo:

If we have not concluded an agreement within the next three weeks, we will be compelled to take our case directly to your shareholders, including the initiation of a proxy contest to elect an alternative slate of directors for the Yahoo! board. The substantial premium reflected in our initial proposal anticipated a friendly transaction with you. If we are forced to take an offer directly to your shareholders, that action will have an undesirable impact on the value of your company from our perspective which will be reflected in the terms of our proposal.

It is unfortunate that by choosing not to enter into substantive negotiations with us, you have failed to give due consideration to a transaction that has tremendous benefits for Yahoo!’s shareholders and employees. We think it is critically important not to let this window of opportunity pass.

Sincerely,
Steven A. Ballmer
Chief Executive Office
Microsoft Corp.

Link

If MS really goes through with replacing the board at MS, what are they really buying? Isn’t the value of a company the leaders who are developing their strategies and new technologies. Things move so quickly it’s almost impossible to develop and release a new web product that actually fits a dynamic market that has changed since development began. The kind of person that creates these apps are highly in tune with the web, creative and enthusiastic. These people are also wealthy and do not respond well to threats.

If MS sacks the board, they lose much of the real value of Yahoo. If they keep the board under threat of being sacked, they will probably leave as soon as possible anyway.

Perhaps the reason MS is buying Yahoo is to gain Yahoo’s share of the search engine market.

Perhaps MS thinks that if people type in www.yahoo.com into their browser when they want to find something on the net, they will continue typing in www.yahoo.com when it redirects to www.microsoft.com (or live.com, or msn.com, or whatever renaming shenanigans MS gets up to next with its web brand - what is the brand recognition of ‘Live’, I wonder).

What will actually happen, is that when someone types in www.yahoo.com and sees MS’s confusing web offerings, they will just type in www.google.com into their browser and stop typing www.yahoo.com.

Its not that difficult to switch search engine. Just typing one word is all it takes.

Yahoo is a Search Engine.

People keep telling me Yahoo has lots of other value than its search engine - web-mail, directory listings, homepages, etc.

The only reason people use these services is because when they started these up Yahoo was a major search engine, powered by Google. They had the best search engine (Google) so people used it. They were able to leverage this to lock users in to their account services.

Now that Yahoo powers its own search, they have less power to keep and retain new accounts. Google has its own account services now and people will continue to switch as long as Google’s search results continue to allow users to find what they are looking for as quickly as possible.