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Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Matt Day.

May 4, 2008 at 1:14 PM

Microsoft drops Yahoo bid: Reaction from around the Web

There’s no shortage of punditry and analysis on Microsoft’s decision late Saturday to walk away from its proposed purchase of Yahoo. Here’s some of the most insightful commentary I’ve seen so far.

Danny Sullivan, editor-in-chief of, has an in-depth analysis of what this means for Internet search and online advertising. He also takes apart Microsoft CEO Steve Ballmer’s attack, in this letter, on Yahoo’s potential search advertising partnership with Google. I’d consider this post a must read for anyone following the industry.

An excerpt:

“How long does Microsoft get? At what point does Microsoft seem to be pushing the O/S 2 to Google’s Windows, the operating system that’s just never going to catch on? Five years doesn’t sound that long until you consider that Google itself isn’t even 10 years old. With everything Microsoft’s put into search, how has it managed to achieve less than Google has, in terms of marketshare, in that period of time?”

Long-time Microsoft watcher Mary Jo Foley, who has just published a book on what’s next for Microsoft after the Bill Gates era, says “Microsoft’s decision to walk restores my faith in the future of the company. … There are so many other things Microsoft could do with $44 billion — both in the online ad market, as well as in making sure its other non-services-centric businesses remain solid.”

Mini-Microsoft, the anonymous employee blogger, is elated that the company isn’t going forward with the deal, as are many of his commenters.

However, Mini is circumspect about one outcome of not spending up to $47 billion on Yahoo: “[W]e’ll continue to live in an era of cash-cow abundance, preventing us from making profit-minded decisions. The lack of the money cushion would have, I presume, actually caused new projects to expect to bring in cash vs. becoming strategic money pits.”

TechCrunch is speculating on whether this might be the beginning of the end for Ballmer at Microsoft. It paints a pretty gruesome scene, and is thinly sourced (“according to one secondhand account that leaked to us yesterday before the deal was called off”), but is just one of many such post-mortems we’ll see this week.

An associated poll had received nearly 2,000 votes by mid-afternoon Sunday. Just over half the respondents said it’s too early to tell what the end of the Yahoo deal means for Ballmer’s career; 27.5 percent said he saved himself by walking; 22 percent expect him to be asked to leave.

What do you think?

Comments | More in Steve Ballmer, Yahoo acquisition


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