Burning Lemons

The entire tech community was shaken today by the news that a long running rumour has actually turned out to be true! Microsoft has offered $44.6 billion dollars (more than the entire GDP of Kenya or Luxembourg according to the CIA World Factbook) to buy “rival” internet company Yahoo!

Many people have claimed that this will almost certainly be blocked by regulators but since Yahoo isn’t doing great and Windows Live (despite being pretty ok in my opinion) has totally failed to catch on. MSN/Live is solely reliable on it’s popular MSN IM protocol and Yahoo’s only good decision of the last 5 years was buying flickr. Google on the other hand has had significantly fewer mistakes GMail has grown incredibly quickly, the core search business remains really strong, Google Docs is catching on (slowly), everyone seems to have Google Desktop (though no-one uses it to search) and Picasa does quite well. Vista hasn’t done well for Microsoft and no-one seems to use Office ‘07 nor has the Zune and no-one I have spoken to really likes the new hotmail and Yahoo has basically done nothing, well it’s done lots but only the core service of Mail still does any good.

So the deal could either kill them both by combining two companies with weak product development or perk them up by combining two companies with good core products and good cash reserves for future devlopment.

Dull bit: Just to clarify Microsoft has only made an offer and Yahoo! is yet to accept or decline it