Sunday, April 27, 2008

Should Microsoft buy Yahoo? I don't think so.

Across the net I've heard numerous advocates of the proposed deal between Yahoo and Microsoft. Here is why I think it is not a good idea:

1) Yahoo is fantastic the way it is - Yahoo Answers, Yahoo Email, Yahoo Search, Yahoo Games, Yahoo Finance, Yahoo News, My Yahoo, Yahoo Geocities, Yahoo Briefcase and hundreds of other services are all good to outstanding. It has developed an awesome internet culture.

There is a reason it is the world's most popular page.

Of course the reason Google is currently more successful than Yahoo is because of Yahoo's failure to create a proper advertising service like Google. That is Yahoo's single biggest weakness and it has prevented it from really cashing in.

2) Web competition

Currently there are three major services, Google, Yahoo & MSN/Live. Would two be better? No. No it wouldn't.

Of course from a shareholder business perspective this is not the case - big cash deal - better prospects for Microsoft - great. Well no actually - if Yahoo stood alone it could monetize far better rather than be absorbed by a cumbersome giant which hasn't had a good idea in a long time.

Furthermore do we really want one giant company ruling the entire technology field? Wasn't the internet concept based on different ideals.

3) Privacy

None of the current three powerhouses have anywhere close to reasonable privacy policies for user data - the Americans lack a data protection act - Reducing user choice means it is highly likely these companies will be able to collect more about people - for Microsoft this means complete control over a large number of users' computing experience.

4) Corporate culture

Microsoft has traditionally built up a reputation of being against free markets and fair competition - Google too - for all those people who argue this will improve the net, I suspect it will actually restrict innovation in the long-term. What if the two agree on certain standards for websites? How will issues like file sharing and copyright management be addressed? Will search results be influenced? How many people will migrate from Yahoo to Google?

Ultimately though Microsoft is being lazy here. The way to success on the internet is to win the hearts and minds of the users - like it did with MSN messenger or too a lesser extent Hotmail for example. It should stop following and start leading again.

If it has the services and people aren't using them, then after ensuring their product is suitable and getting some customer feedback, perhaps it should spend some of its $40+ billion on some marketing and regaining the trust of the public by committing to respecting its users.

Just a thought.

Just a thought.

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