Chris Liddell, senior Vice President and CFO, speaking during yesterday’s earnings call:
As outlined in our recent letter to the Yahoo board, unless we make progress with Yahoo towards an agreement by this weekend, we will consider our alternatives. We will provide updates as appropriate next week. These alternatives clearly include taking an offer to Yahoo shareholders or to withdraw our proposal and focus on other opportunities, both organic and inorganic.
Personally I think the Yahoo deal would be bad for Microsoft. I think it is driven by financial people trying to sum two market shares in search; but it is not so simple. My view is based on problems of integration, morale and culture, plus the risk of further confusing an Internet strategy that is already opaque.
Although Microsoft continues to be trounced in search (not least because it is simply not as good as its competition), there are signs of progress elsewhere. Another snippet from the earnings call: General Manager Colleen Healy mentioned that Live ID take-up is up by 18% to 448 million. No doubt many of those will be worthless accounts, but not all of them. Revenue from online business is up. Organic growth and smaller acquisitions would work better for the company.
What do you mean by ‘organic growth’? Not that I’m accusing you of being opaque, I’m just wondering what unexplored opportunities exist in the Internet marketplace that Microsoft could exploit.
Live Mesh is an example – building on existing internal skills and technologies.
Tim
Live Mesh in interesting not so much in terms of what it offers, but in that it demonstrates that Microsoft is one of the few companies that have the wherewithal and expertise to construct a technology that knits together the Web and client in such a comprehensive fashion. Google could certainly do the Web part of it, but the client would be pretty much out of their reach.
However, I have difficulty enough holding down a job as a demand manager and business analyst and keeping up with developments in my own field without having to learn yet another new Microsoft technology in sufficient depth to determine whether it’s going to be any use to me or not, let alone to exploit it properly. The more I hear about initiatives like this, the more it’s a turn-off for me. And I’m sure I’m not the only one.
Understandable. But I think IT has always been like this.
Tim
I don’t think Yahoo is worth anything like Microsoft offered. I suspect some new player will come out of nowhere and knock Google of it’s pedestal. Lets hope 🙂