Saturday, February 2, 2008

Microsoft playing Zero-Sum game

It didn't surprise me much when Microsoft launched a bid to buy Yahoo!,considering the company's woeful record in online space.It could be seen as a desperate and one last attempt to lift its online business(Forget competing with Google).Moreover, this deal is subjected to scrutinies from anti-trust watch dogs and I am sure Google will try its best to stop this deal going ahead.But Microsoft's underdog status in online ad space may help the deal to get through.

On the surface it looks like MS will take back some control with this move as MS have deep pockets to invest.But that can happen only if and if MS spins off its own online business unit to merge with Yahoo!.Then the companies can get off with integration issues and Google will get less time to cash on the transition.Otherwise Google will totally un-settle the two companies in this uncertainity period.MS also suffers branding issues in its online strategy and Yahoo! will add more injuries.MS already confusing customers with MSN/Hotmail/Windows Live.. whatever the hell is that.MS simply lacks weapons to compete online.

So far,Yahoo! itself couldn't figure out much, how to translate traffic into profit and I don't know how LAME MS will help it.Mind you,Yahoo!'s Project Panama also couldn't lift its revenues.But on the positive side,Yahoo! is one of the pioneers of the web and they have stronger presence in asian markets and Mobile search.Yahoo! search is way better than Live hell and MS at last realized that Google's online success is because of its high-quality search engine.MS was late to search market and I still don't understand why MS links Windows with its online strategy(Why Windows LIVE??Misleading and irrelevant name).I can't imagine that hot properties like Yahoo answers,Flickr,,Eurosport falling in MS hands.Except hotmail(that too acquisition) tell me where MS had success in online business.They coudn't build communities and hot portals even after burning billions of dollars.MS should remember that internet communities are sensitive and it takes only seconds to switch to another site.MS playing Zero-Sum game here and now they are thinking that Yahoosoft+Google=100% of online advertising.They are totally wrong and there are no. of startups who are working towards game-changing online ad technologies.

Given its poor execution of online strategy record, I feel even after this buyout MS will be vulnerable.As long as the company under estimates the open standards it may not find recipi.Internet is all about open and nuetral standards.Imagine, I visited Flickr website through my Ubuntu-Linux notebook and a message pops to me saying you are not using Vista/XP or IE hell.Thats quite possible after this merger and thats my worry,which can force me out to look for alternatives.Now, Microsoft is embracing the disruption and I am really hoping that company will move out from its safe zone(Windows and Office) to the real future.