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Ship of fools

Posted on 6 Mar 2008 at 10:44

Jon Honeyball finds himself reaching for the bottle in a vain attempt to come to terms with the rationale behind Microsoft's bid for Yahoo.

So how will this work with Yahoo? First, we have those "prime internet properties" - Live and MSN. Microsoft will do what it always does and assimilate them in Borg-like fashion. Yahoo will be reduced to a brand name - after all, brands are important (or so my marketing friends keep saying). Then Microsoft will likely slap a Live user account (aka Passport) login onto all the sites, which will annoy users even more than being taken over in the first place - the grumbling has started on Flickr already. Then we'll witness the mass migration away from these former Yahoo "properties" to somewhere else (probably owned by Google). Why use Yahoo Chat when I can use something like Colloquy? Same for Windows Live Messenger. Do I want my screen loaded up with adverts? Er, no, I'll go to places where this doesn't happen.

Google understands that advertising only works when it doesn't annoy the users. Google is my default search engine, but changing to something else is a matter of a few mouse clicks - if Google starts to screw up, I'll walk. Why don't I use Microsoft Live? Because I know Google and it mostly works so I have no great reason to choose something else. Merging Yahoo's and Microsoft's search into one engine doesn't do anything for me at all unless the result is a much better search engine, and it would have to be astonishingly good for me, or anyone else, to get over their inherent inertia and make the move.

So when Mr Ballmer talks about coming up with a credible competitor to the dominance of Google, my jaw drops and bounces a few times. If I were a Microsoft shareholder I'd want to know first of all where all the money went over the past 15 years on MSN (the original version, the one that used a development tool codenamed Blackbird, for those with long memories), then after that on the new MSN, and more recently on Live. If Microsoft, with its huge bank balance, can't succeed in gaining a substantial market share given the money it's poured into Live, then buying Yahoo surely isn't the answer.

Want to get very gloomy indeed (and why not... there's still gin left in this bottle)? Ask where this deal will leave Microsoft's entire Web 2.0 development strategy. Silverlight? Web services? Ah yes, it's all XML so it will all just interoperate. But I'm told that one big reason for Microsoft chasing after Yahoo is its developer community, which, of course, has nothing to do with Microsoft development tools at all and wouldn't touch them with a barge pole. Clearly, I'm missing something important.

Here's the bottom line: Microsoft thinks that acquiring Yahoo will be additive, like two plus two equalling four. Or, given its belief that it can integrate the companies effectively and get some enhanced value from the combination, perhaps two plus two will equal six. But the cold, hard reality is that Microsoft is going to empty the bank account for a deal in which two plus two is more likely to equal three, and then two point nine, two point eight, and so on... at which point, Microsoft's middle management will panic and attempt to Borg the entire mess and we'll end up with two plus two equalling one point nine.

A couple of years ago, I predicted that Microsoft would have retreated into its core marketplace of business desktop and server software by 2011. Do I see anything here to make me revise that prediction? Afraid not. On the contrary, it just makes it all the more likely. Go on, Redmond, prove me wrong.

Windows 7

I was chatting to some Redmondians a few days ago about Windows 7. It appears there's a move afoot to replace the Vista kernel with a new one, which I talked about in this column a few months ago. This in itself is interesting and I have great respect for the Windows Kernel team. But things get a little more foggy when you look a few layers higher at the real guts of the operating system. The word is that there's a big compatibility interface layer going on top in an attempt to improve things, and that doesn't sound quite right to me.