Summary: Miscellaneous updates regarding Microsoft's online business

Yahoo's appalling deal with Microsoft [1, 2] has meant that key staff might be eclipsed by Microsoft's shadow. They are paying the price for the mistakes of Bartz, whose company turned into a second fiddle of Microsoft. Fox put it like this:

Yahoo Inc. (NASDAQ:YHOO) and Microsoft Corp. (NASDAQ:MSFT) have thus failed to impress Yahoo's investors with their proposed Internet search and advertising partnership.

Many good souls remain at Yahoo, whose staff is trying to move on, despite the barriers imposed by Microsoft.

The fate of Yahoo Inc has become intertwined in the public's imagination with the success or failure of its dealings with Microsoft Corp in recent years.

That's despite the fact that as much as 70 percent of the value investors put on Yahoo's depressed shares are tied up in its international assets or cash holdings -- factors that have nothing to do with Microsoft.

According to AFP, "Yahoo! vows to fight Microsoft on new front" and Reuters says that "Yahoo [is] to compete with Bing despite Microsoft deal."

Yahoo Inc said on Monday it has revamped its search to compete against Microsoft Corp's Bing, even as it relies on the Redmond giant to power its queries.

We previously wrote about antitrust barriers to the Yahoo!-Microsoft deal and there are newer reports about the subject. An antitrust attorney now says that the Microsoft-Yahoo deal won't pass regulatory muster. That's what the headline at IDG states anyway.

A prominent antitrust lawyer predicts that Microsoft and Yahoo's new partnership won't pass muster with government regulators because it would narrow search competition.

Matthew Cantor, a partner at Constantine Cannon LLP in New York, said that when Yahoo's own search tool disappears, only two major search engines will remain -- Google and Microsoft's Bing.

The now-defunct Seattle P-I has a copy of a similar report from Associated Press and The Chicago Tribune has more to say. How about this one which says "Microsoft, Yahoo Search Ads Deal in Regulatory Purgatory"? There may also be additional pressure from China:

More antitrust complaints like the one filed against Microsoft in China last year could target foreign IT companies under new draft regulations released by the country, one law firm says.

Meanwhile, the lawyer who filed the complaint against Microsoft for selling at high prices does not expect a result in the case for another three to five years, he said Tuesday.

There is clearly a lot of pressure to break the deal apart or at least change it significantly.

As we wrote very recently, there are reasons to suspect that Microsoft uses AstroTurf groups to advance the perception that the Yahoo-Microsoft deal is welcomed.

Microsoft may be using the same AstroTurf groups that it used to derail Yahoo!-Google [1, 2, 3] to advance Microsoft-Yahoo! This would not be surprising at all. Here is another take on Microsoft's “Screw Google” meetings:

It turns out Microsoft has been busy holding weekly “Screw Google” meetings, trying to figure out how to throw roadblocks in front of Google as they continue to dominate the search arena. It’s easy for me to say, but doesn’t it make a lot more sense to spend millions of dollars making something that’s actually better than Google rather than simply trying to make them look bad?

[...]

It’s time for Microsoft to stop wasting their money worrying about Google, and start breaking their own trails. Microsoft does have some diamonds in their rough though — one example is their development tools, frameworks and platforms. This includes WPF, Silverlight and Microsoft Surface — and in my opinion, Microsoft needs to invest more heavily in those technologies.

Guess who is defending Microsoft's “Screw Google” meetings? Their old media shill, Eric Savitz. He almost promotes AstroTurfing, forgetting that it's not about opposition to Google, it's about the way it's done by Microsoft. Unethical people endorse unethical behaviour and some of it may be illegal, too.

As we explained before, Microsoft is also trying to bundle its search engine with the Web browser (and by inference, with the operating system). Mozilla has serious opposition to the bundling, which leads it to being attacked by the Microsoft mob. Here is some more about that:

Microsoft told EU antitrust officers on July 24 that to ease their concerns about its market dominance, it would provide European users a choice of Web browsers with its upcoming Windows 7 operating system.

Regardless of how it all ends up, Microsoft's efforts to force IE users to use Bong [sic] is simply not working. As TechCrunch put it:

When It Comes To Search, Bundling Bing In IE Barely Gives It An Advantage

[...]

Back in the 1990s during the original browser wars between Netscape and Internet Explorer, one of Microsoft’s chief weapons was the ability to bundle IE into Windows as the default browser. With bundling came market share, or so the government argued in its antitrust case against Redmond.

Fast forward to today’s search wars. You’d think that bundling a search engine into a browser would have some impact on market share. But some new data provided by search advertising network Chitika suggests that at least for Bing, being bundled with IE isn’t doing it much good.

From Google Watch:

Bundling Won't Help Microsoft Bing Versus Google

[...]

Search is a different animal. Microsoft never successfully bundled search with IE because, well, Microsoft search pre-Bing was so inferior to Google.

In addition to all this, Microsoft is now pushing IE8 down the throats of many businesses (not offering them choice).

As promised more than a month ago, Microsoft Corp. yesterday began pushing Internet Explorer 8 to enterprises via Windows Server Update Services (WSUS).

The IE8 upgrade for Windows XP, Vista, Server 2003 and Server 2008 was cast as an "Update rollup" to WSUS, Microsoft's most popular tool for deploying patches within businesses.

If Microsoft can use Windows Update to push people to 'choosing' another Web browser, why are Microsoft's rivals left out of this "Update"?

Yesterday we also wrote about Microsoft's bribes for people who use Bong [sic]. Chris Matyszczyk from CNET is the latest among many reporters who call it "bribery", indeed.

Microsoft's Bing decides on bribery

[...]

It does seem like splendidly commercial bribery.

So where is the fairness in competition? And why was Microsoft permitted to destroy Yahoo! from the inside? Where are the industrial protections? One must be delusional not to see the unjust.

On the bright side, Microsoft has just lost another major partnership online, so despite all this abuse, Microsoft's influence is still eroding.

Microsoft and Bell no longer sympatico

Microsoft Corp. is pulling the plug on its online partnership with BCE Inc., bringing an end to a deal that created one of the most visited websites in Canada in the wake of the dotcom bust, but that quickly became outdated with the rise of the online advertising industry.

There is more information in The Globe and Mail, even Microsoft sites:

Two powerhouses in the Canadian online world will end their five-year marriage next week and begin competing with each other for the same advertising dollars.

Microsoft Corp. and BCE Inc.'s Bell Canada will close their Web portal, sympatico.MSN.ca, on Tuesday and refresh their own sites: MSN.ca and sympatico.ca.

Why did they liaise in the first place? Whose interests is Bell serving? ⬆

“This anti-trust thing will blow over. We haven’t changed our business practices at all.”

--Bill Gates