13 June 2008

The Biggest Loser

Everyone is acting as if the big loser of the whole Yahoo - Microsoft - Google fiasco is Yahoo (and Yahoo's shareholders of course). But let's be honest... how many people weren't already thinking of Yahoo as a walking corpse already? Yeah... the company is totally fucked now. But they've been pretty much fucked for at least the last 2 years.

Regardless... if you look at this from a wider perspective, then it looks the biggest loser in this whole thing is Microsoft.
And I'm not just talking about the hit they just took when it comes to search (where now Google will simply own the space).
Let's predict what will likely happen now for Microsoft. First... they're going to panic. Then... they're going to briefly try and figure out how to compete on Search Advertising (answer, they can't). Finally... they're going to make the decision that they simply cannot afford to lose on Display Advertising. And they're not going to be able to win that battle just on the back of Atlas. So what are they going to do? My money says they go after AOL.

There... I said it. Yup... Microsoft buys AOL.

And then we have the biggest Loser.
Microsoft saddled with AOL. An impossible acquisition to manage. Totally unrealistic expectations from the street. And all the while, Google is spending the enormous piles of cash they're making (now larger thanks to Yahoo). And they're spending the cash going after Microsoft's core businesses.

PS. I can't believe that for the second time in the last 12 months Google managed to not have to spend big bucks to get exactly what they want. First time - wireless spectrum. Now - Yahoo. Gotta hand it to them.


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