Probably the hottest news abuzz this year is the looming merger — some say hostile takeover — between Microsoft and Yahoo. Earlier, it was about the resistance on the part of Yahoo to capitulate to the software giant. Lately, the focus has shifted to Redmond and the perceived motive behind their bid to acquire the second largest search engine.
Very recently, two analysts from Gartner, a research services firm, asserted that Microsoft is now on shaky ground due to the state of Windows Vista, which they described as “collapsing”. The analysts, Michael Silver and Neil MacDonald, practically assessed the latest version of the Windows OS as a failure due to disappointingly low market acceptance. According to a rival firm, Forrester Research, by the end of 2007, only a little more than 6% of enterprise-level PC users had migrated to Vista.
The main reason cited for the poor sales performance is the lack of understanding among general users of what makes Vista so much better than Windows XP. And for those who do know, many of them are turned off by the resource-hungriness of Vista. Also, it’s reported that most of those who have adopted the latest OS were users of the nearly-extinct Windows 2000; apparently, Windows XP users (like me) are staying put.
Gartner is now widely quoted as saying that Microsoft is in an “untenable” situation. It predicts that Microsoft Corp. could be in financial straits by 2011 due to a presumed thinning of the latter’s market base. The firm further forecasts that a large number of technology users will be shifting to “OS-agnostic applications” (computer programs not dependent on what operating system is installed), thereby adversely affecting another area that has been dominated by Microsoft: office productivity suites. A prime analogy would be Google Apps, which competes with Microsoft Office.
The Google Apps suite — documents, spreadsheets, presentations, calendar, email, and even more to come — is deployed over the Web, and so is made available to anyone for free, regardless of what’s making his or her computer run. Increased acceptance of such systems could very well erode Microsoft’s revenues from MS Office, reportedly $16 billion in 2007 (including Exchange Server, which allows Office applications to be deployed utilized across the Internet, among other things).
Gartner then proceeded to explore the notion that this is what’s inducing Microsoft to get its hands on Yahoo: to finally capture, and capitalize on, the Internet-ads history (and potential) of the first search engine to gain worldwide attention.
True, virtually every Web venture is targeting Internet advertising as a source of huge revenue. Even Google is in the bandwagon (if it’s not, in fact, the horse). Microsoft, however, has remained staunchly a software publisher and provider, and has ruled over this landscape for a couple of generations. Therefore, isn’t it rather a stretch to assume that this particular Goliath will just keel over and die?
The points made by Gartner are worth looking over. But, in my opinion, MS Office and Windows (perhaps not Vista but the keenly-anticipated Windows 7) are here to stay for longer than anyone might care to imagine.
So, why does Microsoft want to have Yahoo!? At this point, it’s still anybody’s best guess. My take on this is: isn’t it but natural for a business to proceed into further territory?
microsoft wants to win this internet era’s search engine war.
Well, whether that’s the case or not, I agree with what an author at TechCrunch.com said: the world needs a counter-balancing for Google.
OS wars, Office wars, Internet browser wars, search engine wars, internet api wars, and other tittle-tattles. Microsoft is the only company that has stayed in all these wars for more than a decade and “counter-balanced” the majority of technologies! Whether Microsoft really needs yahoo or not, this won’t make a budge on Microsoft’s overall market impact. It’s like in 1995, we hear people saying Microsoft will die in the next 5 years because of Linux… geez
Rod, the fact that Microsoft is aggressively pursuing Yahoo, IMHO, indicates that MS believes that the acquisition will indeed affect their bottom line. And, I do think that, if finally MS has its hands on Yahoo, there will be market impact. But again, one can only guess at what’s in the heads of people in Redmond.
I agree with you, though: Microsoft is no pushover.
yes i agree, Microsoft won’t be good in doing the “counter balance” for the search engine wars. it will make things worst.
Microsoft’s interest in Yahoo is simple. They realized, for quite some time now, but only after the Google phenomena, that the new OS is the Internet. Through Yahoo, they can distribute their own version of web-based apps, with online advertisement only as a bonus.
Or, they conquer the ad wars via Yahoo and eventually demoralize Google’s apps and bring the app wars back to the real OS (inside your PC).
Either way, it’s just a businessman’s strategy. It’s not like the sky is falling on Microsoft.
Look at what happens to the softwares Microsoft had bought. Foxpro and Delphi are programming languages just like Visual Basic. After the giant bought the two programming language, those two just died. “Died” meaning there are no more upgrades on the softwares. Have you seen Foxpro on Visual Studio.Net? What about Delphi?
Look at Microsoft producing their own flash player. Yes, business is business. But there are times that you can’t just buy and kill other softwares. I guess they have to concentrate on their OS first, on making it better, than creating new softwares to compete with others.
And if they bought Yahoo, what would happen to Yahoo mail, to Yahoo search engine?
Look at what Adobe did. Adobe is also buying softwares of their competitors. But it doesn’t mean they would kill those. It would depend on what software is more powerful.
@berryblitz
FYI, MS did not bought Delphi. It is still owned by Borland, but as we all know Borland will vanish and will be forgotten. The failure to innovate made them doom to fail.
FYI, the Sql Server 2005 enterprise customers are using now is from Sybase. Axapta, Navision, and Solomon ERPs are all buy outs.
FYI, MS bought a firm in thailand specialized in
true, the two will perish.. but just as expected because every software has shelf life else we may still be living the COBOL, BASIC and TUBRO ASM. And im sure you dont want to write “Hello World” with a hundred lines of code.
i think MS is very much focused with their OS, in fact they’re about to release new Windows Server 2008 and Service Packs for Vista just been released. Next version of windows is also in the development. In my team, we are using Visual Studio 2008, given, they are focused on several technologies at the same time. Just bad, they failed in Search Engine war.
MS wanted to buy MS basically not just for its internet arm but for its talented engineers and scientist. MS experienced a lot frustrations and failures in the search engine arena from MSN Search, Live Search etc., this time can be a different game, and worth trying.
Adobe did not kill Flash, because that would be the dumbest idea they would ever entertain. Business wise, its not so smart
If a start-up company is very promising, why would i not try to buy it and have them work with me instead if i know its better for both of us. If it doensn’t work the way I expect it, thrash it, try another one. If i am the owner of a company and I was offered a sum which would make me not work anymore my whole life, i would love that. Or… that will give me a chance to try another venture
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@winston, how can we tell
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i thinks its good for us advertisers, with competition around we can spend less on Ads and get more results LOL. Competition makes the service or product better and cheaper (hopefully)
hmmm maybe i’m wrong about it. sorry. but what i know about microsoft is that they are really good at marketing and sales strategy compare to others (i guess and i believe)
i’m just wondering what will happen to their RIA-related tools. i haven’t used those yet. i’m not sure if i would be able to use those. i am using the adobe flex for creating RIA applications, but of course, i would want to compare which of the two would better fit me.
@berryblitz, its fine we’re all just exchanging views no reason for a sorry
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regarding MS’ RIA, they have released Silverlight and XAML which is a markup based RIA development framework. very much alike Adobe AIR. If things goes as expected with MS RIA, it will be a real suite for RIA. XAML + Expression Studio will take some market share dominated by Flash.
I think we all have the freedom to choose on what would be best for a certain project or requirements, anyways its our users that will tell if what we have made rocks, regardless of what tool we used.
PS. I am in no way directly connected with MS, but i have the privilege to access all their tools and technologies. I would love to share with you what i know. Good luck.