Bonum Certa Men Certa

Yahoo: The Biggest Threat Comes from the Inside

A lesson learned from the security sector

Little dragon



ARE WE SEEING YAHOO 'taken over' from the inside? A little more than before maybe? It's hard to say with sufficient certainty, but it does not look encouraging. A couple of days ago we wrote about the inheritance of Jerry Yang's chair. Sue Decker fought away a hostile takeover. She staved off the bids from Microsoft along with Jerry Yang and she competed for the role of CEO against Carol Bartz.

Bartz worked for a Microsoft partner, Autodesk, which is a promoter of lock-in and even software patents (they cross-licensed with Microsoft not so long ago). She will soon become the CEO of Yahoo and this is problematic because:

Autodesk, known for its computer-assisted design software, happens to be a longtime Microsoft partner, so the choice may stir new speculation about a possible Yahoo-Microsoft search deal.


Microsoft's principal mouthpiece in CNET is already yapping about a Microsoft-Yahoo transaction.

"It depends on their offer," said a source familiar with the board's thinking. "If they were to come to (Yahoo) with an offer of $33 a share, (the company) would be stupid if to say 'no' now."


For Microsoft to touch Yahoo would be difficult because it's a thing that may pose a dilemma; for starters, Microsoft would enter deeper debt [1, 2, 3, 4, 5], but more importantly, Microsoft would take Yahoo's business to the cleaners, just like it always does. As the following post demonstrated a few days ago, "Microsoft is not a web company."

I want to talk about Microsoft's web strategy. But Microsoft is a huge company, with a lot of parallel activities in this space, and there are so many angles from which you can approach the subject. So I've decided to focus on a single, instructive example: the front page of Microsoft.com.

Disclaimer: this is a cheap shot. I know it is. A single HTML page does not embody the entirety of Microsoft's strategic direction and corporate culture. I'm also subjecting it to rigorous scrutiny of the kind few web pages get. Nevertheless, Microsoft.com is one of the most popular destinations on the Internet and they are trying to make a name for themselves in the web space and they do have a gigantic budget which they could expend on their front page.

Here's where my journey began, and what started my investigation that led to this post. This is the front page of Microsoft.com, rendered in Firefox (v3.0.5, Windows XP). This and all subsequent screenshots are cropped; click for the full capture.


Microsoft never designed software with the Internet in mind. The Internet scared it because it threatened its dominant position. In 1993, Bill Gates said: "The Internet? We are not interested in it." In fact, several years ago, a senior Windows executive said: "Our products just aren't engineered for security."

One reader tells us that "the transition from the outgoing US administration is an utter catastrophe in regards to e-mail. Everything from astronomical volumes of files to lost material to multiple, conflicting versions of what should have been the same document."

"So while VBA, Access and Windows on the "voting machines" helped get us into this mess, Microsoft Exchange will help prevent getting it sorted."

Can Microsoft ever be trusted with any of Yahoo's Web properties, given the mess which is MSN or Hotmail, for example?

"You don't need to buy the company, just destroy them and then take their business."

--Duncan 'Dragons Den' Bannatyne

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