EditorsAbout the SiteComes vs. MicrosoftUsing This Web SiteSite ArchivesCredibility IndexOOXMLOpenDocumentPatentsNovellNews DigestSite NewsRSS

08.01.09

The Ugly Reality of the Yahoo-Microsoft Deal

Posted in Antitrust, BSD, Google, Microsoft, Search, Servers at 7:18 pm by Dr. Roy Schestowitz

“Bartz says search engine Bing unlikely to make significant mark”

MarketWatch (June 2009)

Scary face

Summary: Analysis of the impact of the big deal, which may still get blocked

SEVERAL DAYS ago we explained that Yahoo! had been seized from the inside in the sense that people who are loyal to Microsoft escalated up the ranks of the company while those who acted as barriers got pressured outside the company. Technically, it was a proxy fight (see the links at the bottom for necessary background). Linux should protect itself from similar dangers, which for the most part it does, but Novell’s participation in development was never particularly helpful [1, 2, 3, 4, 5, 6, 7, 8].

“We just lost a search engine by this deal. It’s sad.”
      –Pamela Jones, Groklaw
The following links are mostly ‘borrowed’ from Groklaw, as they very nicely illustrate the stupidity of signing that search deal with Microsoft — a deal which puts terrible propaganda in place of Yahoo! We wrote about many other issues with Bing.

According to APF, Ballmer said : “It is a win-win strategic partnership and it is a win-win deal from my perspective… Together we can create economic value that’s going to benefit Yahoo! shareholders and Microsoft shareholders.”

So why did Yahoo’s stock fall so sharply?

Pamela Jones inquires: “What if you are not a shareholder? We just lost a search engine by this deal. It’s sad.”

This is not final however. That deal may still be blocked based on the following analysis from the Wall Street Journal.

The new Internet-search venture between Microsoft Corp. (MSFT) and Yahoo Inc. (YHOO) is likely to face considerable scrutiny from federal antitrust regulators, according to government officials and analysts.

The Justice Department will look at the deal carefully to be sure it doesn’t harm competition by allowing two top Internet companies to team up.

Bloomberg has the article “Yahoo Chief Gets ‘No Confidence’ Vote on Search Deal.” This states the following:

“It’s a tremendous vote of no confidence in Carol Bartz,” said Larry Haverty, a portfolio manager with Gamco Investors Inc. in Rye, New York. The firm manages about $20 billion, including 1.6 million Yahoo shares. “This is anything but a boatload of cash.”

It’s terrible, and it is suggestive that accusations of Bartz “selling out” have a substantial basis to them. It remains obvious who the winner and who the loser is in this deal. Here is how one person put it on the Charlie Rose show.

CHARLIE ROSE: Is this going to work?

STEVEN LEVY: It has a lot of hurdles. I think the upfront money really isn’t the key to Yahoo! The key is, Yahoo! is disbanding their search team, their engineering, and disbanding the team which built their advertising engine to sell ads on search. Now, these happen to be some of the most important aspects of engineering at a company there. And really, if Yahoo! wants to be a top Internet company, it has to have the engineering chops to keep doing that.

So, it’s going to miss out on that. And it will save money by not hiring — having those people to pay, but those are the people you want in your company.

[...]

And the big problem here is that Yahoo! really — they kind of walked away from the most interesting fight on the Internet right now, which is search. And they handed it over to Microsoft for less than any of the previous deals that were on the table. The four real deals that were on the table going back to the $45 or $48 billion offer in February of 2008, the revised search deal that Microsoft offered, which included $8 billion to buy 16 percent of Yahoo! and $1 billion payment for the search part of the business. The Google deal that got squashed, that guaranteed $800 million in revenues. This deal was the worst of all the deals.

To add to those claims about disbanding of engineers, one of our readers warns that “it looks like Microsoft gutted Yahoo and is keeping the outer shell. If PHP and FreeBSD developers were really the target, then this does close to maximum damage because Microsoft was able to eliminate the employment protections in case of buyout.”

Looking back at the past year and a half, this was an ugly saga filled with bullying and cronyism. Yahoo! has only softened because a former Microsoft partner was put in charge of Yahoo! and the board of directors too became saturated with those who were in cahoots with Microsoft. That’s how proxy fights are done (background below).

Related posts:

“Yahoo will do perfectly fine even if it doesn’t strike any type of deal with Microsoft, Yahoo CEO Carol Bartz said Wednesday.”

IDG News Service (June 2009)

Share this post: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Digg
  • del.icio.us
  • Reddit
  • co.mments
  • DZone
  • email
  • Google Bookmarks
  • LinkedIn
  • NewsVine
  • Print
  • Technorati
  • TwitThis
  • Facebook

If you liked this post, consider subscribing to the RSS feed or join us now at the IRC channels.

Pages that cross-reference this one

What Else is New


  1. Links 25/10/2014: KDE Mockups, Update on GNOME Outreach Program for Women

    Links for the day



  2. After Infecting Unity -- Successfully -- Microsoft's Partner Xamarin Wants to Infect Unreal Engine With .NET

    Xamarin continues to spread dependence on Microsoft to more gaming frameworks, not just platforms such as GNU/Linux, Android, and even permanent-state devices



  3. Taking Microsoft Windows Off the Grid for Damage to Businesses, the Internet, and Banking Systems

    Microsoft's insecure-by-design software is causing massive damages ([cref 27802 possibly trillions] of [cref 13992 dollars in damages to date]) and yet the corporate press does not ask the right questions, let alone suggest a ban on Microsoft software



  4. City of Berlin Does Not Abandon Free Software, It's Only Tax Authorities

    A Softpedia report that says the City of Berlin is moving to Microsoft Office is flawed and may be based on a poor translation



  5. Nadella a Liar in Chief at Microsoft, Pretending That His Anti-Competitive Practices Are Unfortunately Imposed on Microsoft

    The nastiness of Microsoft knows no bounds as even its assault on GNU/Linux and dirty tricks against Free software adoption are characterised as the fault of 'pirates'



  6. Reuters Writes About the Demise of Software Patents, But Focuses on 'Trolls' and Quotes Lawyers

    How the corporate media chooses to cover the invalidity of many software patents and the effect of that



  7. Links 24/10/2014: Microsoft Tax Axed in Italy, Google's Linux (ChromeOS/Android) Leader Promoted

    Links for the day



  8. Links 24/10/2014: GNU/Linux History, Fedora Delay

    Links for the day



  9. Links 23/10/2014: New *buntu, Benchmarks

    Links for the day



  10. Links 22/10/2014: Chromebooks Surge, NSA Android Endorsement

    Links for the day



  11. Links 21/10/2014: Debian Fork Debate, New GNU IceCat

    Links for the day



  12. Criminal Microsoft is Censoring the Web and Breaks Laws to Do So; the Web Should Censor (Remove) Microsoft

    Microsoft is still breaking the Internet using completely bogus takedown requests (an abuse of DMCA) and why Microsoft Windows, which contains weaponised back doors (shared with the NSA), should be banned from the Internet, not just from the Web



  13. Microsoft 'Loving' GNU/Linux and Other Corporate Media Fiction

    Microsoft has bullied or cleverly bribed enough technology-centric media sites to have them characterise Microsoft as a friend of Free/Open Source software (FOSS) that also "loves Linux"



  14. India May be Taking Bill Gates to Court for Misusing His So-called 'Charity' to Conduct Clinical Trials Without Consent on Behalf of Companies He Invests in

    Bill Gates may finally be pulled into the courtroom again, having been identified for large-scale abuses that he commits in the name of profit (not "charity")



  15. The Problems With Legal Workarounds, Patent Scope, and Expansion of Patent Trolls to the East

    Patent trolls are in the news again and it's rather important, albeit for various different reasons, more relevant than the ones covered here in the past



  16. Links 20/10/2014: Cloudera and Red Hat, Debian 7.7, and Vivid Vervet

    Links for the day



  17. Links 20/10/2014: 10 Years Since First Ubuntu Release

    Links for the day



  18. How Patent Lawyers Analyze Alice v. CLS Bank

    Breaking down a patent lawyer's analysis of a Supreme Court's decision that seemingly invalidated hundreds of thousands of software patents



  19. Is It Google's Turn to Head the USPTO Corporation?

    The industry-led USPTO continues to be coordinated by some of its biggest clients, despite issues associated with conflicting interests



  20. The EPO's Public Relations Disaster Amid Distrust From Within (and EPO Communications Chief Leaves): Part VII

    Amid unrest and suspicion of misconduct in the EPO's management (ongoing for months if not years), Transparency International steps in, but the EPO's management completely ignores Transparency International, refusing to collaborate; the PR chief of the EPO is apparently being pushed out in the mean time



  21. Links 18/10/2014: Debian Plans for Init Systems, Tails 1.2

    Links for the day



  22. Links 18/10/2014: New ELive, Android Expansion

    Links for the day



  23. Another Fresh Blow to Software Patents (and With Them Patent Trolls)

    Another new development shows that more burden of proof is to be put on the litigant, thus discouraging the most infamous serial patent aggressors and reducing the incentive to settle with a payment out of court



  24. Links 16/10/2014: New Android, SSL 3.0 Flaw

    Links for the day



  25. How the Corporate Press Deceives and Sells Microsoft Agenda

    Various new examples of media propaganda that distorts or makes up the facts (bias/lies by omission/selection) and where this is all coming from



  26. Vista 10 is Still Vapourware, But We Already Know It Will Increase Surveillance on Its Users and Contain Malicious Back Doors

    The villainous company which makes insecure-by-design operating systems will continue to do so, but in the mean time the corporate press covers only bugs in FOSS, not back doors in proprietary software



  27. Links 15/10/2014: KDE Plasma 5.1 is Out, GOG Reaches 100-Title Mark

    Links for the day



  28. With .NET Foundation Affiliation Xamarin is Another Step Closer to Being Absorbed by Microsoft

    Xamarin is not even trying to pretend that separation exists between Microsoft and its work; yet another collaboration is announced



  29. The EPO's Protection Triangle of Battistelli, Kongstad, and Topić: Part VI

    Jesper Kongstad, Benoît Battistelli, and Zeljko Topić are uncomfortably close personally and professionally, so suspicions arise that nepotism and protectionism play a negative role that negatively affects the European public



  30. Corporate Media Confirms the Demise of Software Patents in the United States; Will India and Europe Follow?

    It has become increasingly official that software patents are being weakened in the United States' USPTO as well as the courts; will software leaders such as India and Europe stop trying to imitate the old USPTO?


CoPilotCo

RSS 64x64RSS Feed: subscribe to the RSS feed for regular updates

Home iconSite Wiki: You can improve this site by helping the extension of the site's content

Home iconSite Home: Background about the site and some key features in the front page

Chat iconIRC Channel: Come and chat with us in real time

CoPilotCo

Recent Posts