Microsoft + Yahoo! = Meh!oo?

By now, almost everyone should have heard of Microsoft’s offer to buy Yahoo!. More experienced pundits have already analyzed this, and we can definitely see the Techmeme pile-on. Though, I would like to add my thoughts to this too. Some think it is a good deal, and others disagree. Yahoo!’s Board of Directors will examine examine the offer, so it’s not a done deal yet. There can also be other suitors to crash, join the party.

When Flickr got acquired by Yahoo!, I was both happy and wary. I was glad to see Flickr recognized for being a great photo sharing community, but feared that its identity would be diluted. Before the acquisition, Flickr was a sister project to Game Neverending, which I had the chance to beta test. The community was amazing and we got to hang out with the people that worked on the game too. When it was shut down, it was very disappointing to the extent that I refused to sign-up on Flickr. Time passed; I eventually did and could see the spirit I loved to be around. What I am trying to show here, is the DNA of which a team is made of is not easy to transplant. The passion bleeds and permeates the service they build. In fact, I think I looked at Yahoo! more favorably after this. Despite a few bumps, Flickr has fared well since Yahoo! took over. I have also been satisfied with del.icio.us.

On the other hand, Microsoft doesn’t seem to be able to get much going on the web. In my opinion, its most successful service is Xbox Live, but is accessed via a game console. Maybe MSN Messenger? But I’ve moved on when there were alternatives (it was funny how almost overnight, the majority of people I knew jumped from ICQ to MSN, and some of us created a Hotmail account solely for this purpose). Perhaps Microsoft just doesn’t hang out where I do.

Yahoo! has had failures too, but there is effort. They did some consolidation in the area of tagging. They have an interesting Javascript library. And they are embracing OpenId. I do not blame them for lack of trying. We live in period flush with golden opportunities on the web, with many many smart people out there. Now, why can’t I name something Microsoft did that excited me?

I cannot picture how joining these two organizations together can make them stronger, even though on paper it can seem impressive. It’ll just be Meh!oo?. The most important point is probably in the area of advertising, because there seems to be so much money in this. Google was fortunate, and now has the money and the clout to do what they want.

If anything, Microsoft and Yahoo! should be shrinking. They are not agile enough. There are too many divisions, too much hierarchy. Plus, not everyone is rowing in the same direction. But also, perhaps not everyone agrees with the direction. Lack of leadership and vision? Weak glue to bring everyone together? Google’s culture is often overshadowed by the lavish perks, but is one of its hidden strength.

And the culture! The two companies are quite different, and with Microsoft trying to take over, there could be a lot of friction. Yahoo! is stronger in communities. Microsoft shies away from such. Is that why they had to come up with welcome to the social? This is why the deal can look complementary.

And the brands! What to do with these? The biggest headache will be Hotmail vs. Yahoo! Mail. Will they blend? Already, there is talk of a Flickr rebellion.

Regardless of my feelings on the matter, I think someone will have to step in to challenge Google. The industry will be more healthy with some good competition. Much like when Gruber wrote about Apple needing a Nikon.

Update: Gruber also wrote about this. I think it describes my feelings better, and with more technical details. I have a long way to go on blogging and writing.