Microsoft targets Web with Yahoo or alone: Gates
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Microsoft Corp plans to invest heavily in Web search to competes against Google Inc, even if it fails to acquire Yahoo Inc, the company's chairman Bill Gates said on Monday.
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Bill Gates said that Microsoft planned to introduce a new version of its Internet Explorer Web browser with stronger features to protect against viruses.
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More competition courtesy of the proposed Microsoft-Yahoo! combo?
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They both are aiming at Google but sit in different places--literally. Microsoft's work just begins with having to win over Yahoo's board and shareholders.
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Business & money: Microsoft purchase of Yahoo would create an unacceptably dominant online business, says Google
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In what could be his final CES keynote for a while, Gates shows off some gadgets and touts a deal with NBC to jointly run an Olympic Web site.
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A combination of Microsoft and Yahoo could reshape the Internet landscape for millions of Web users: Would the two companies join their online portals? Could they rethink the desktop computer to integrate Web content more directly?
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Microsoft executives said very little on Friday about the undeniable challenges of integrating the company&#39;s Internet division with Yahoo, largely avoiding the proverbial elephant in the room that could delay or, in some cases, eliminate benefits of the deal.At the heart of the acquisition is Microsoft&#39;s goal of giving its online advertising and online services business a major boost, ending years of business and technology defeats at the hands of common rival Google.Microsoft wants to make sure that as online ad spending doubles to about $80 billion in the next three years, it will be in a much better position to grab a larger piece of the market, specifically in sponsored search, which is the biggest online ad segment and where Google dominates.As CEO Steve Ballmer, President of Platforms &amp; Services Division Kevin Johnson and Chief Software Architect Ray Ozzie said repeatedly during Friday&#39;s news conference, Microsoft wants to swallow Yahoo to accelerate its pace in online advertising. With Yahoo&#39;s online services, engineers, and ad platforms, Microsoft hopes to become a stronger competitor to Google than it is today.That all sounds fine in theory, but Ballmer and his colleagues said little about the energy and know-how they will need to make this proposed $44.6 billion acquisition work, considering that the companies have a significant overlap in online services, markedly different cultures, and an abundance of inflated professional egos at every level.Not to mention that Yahoo these days is far from functioning as a well-oiled machine. Yahoo has been in significant turmoil for more than a year. Seasoned executives who are experts on its business have struggled and largely failed to restore the company&#39;s technical edge and business focus. That&#39;s a mess that Microsoft will inherit and will have to solve in order for the deal to work its expected magic.In short, Microsoft must make sure that, in its quest for scale and speed, it doesn&#39;t end up getting stuck, its wheels spinning, trying to mesh Yahoo with MSN, while Google speeds further ahead. It&#39;s clear that to take advantage of the online ad growth, companies will need to innovate and change quickly, and not be sidetracked by acquisition distractions.Among the many emerging opportunities in online advertising are: the mobile sector, which is expected to go from almost nonexistent to vibrant in the coming years; social Web properties, such as social networks, blogs and social news sites, which haven&#39;t been monetized properly and hold great promise; and video, both in the form of video ads and ads in videos.There were indications during Friday&#39;s news conference that Microsoft may not have taken the time to fully assess the magnitude of the integration complications. Despite Ballmer&#39;s assurances that he personally has thought &quot;long and hard&quot; about the Yahoo acquisition, there is evidently a level of urgency about the move, or else the deal wouldn&#39;t have been an unsolicited offer, as Yahoo has portrayed it.If, as Ballmer indicated, the companies have been in on-and-off talks for about 18 months about a possible acquisition, it&#39;s fair to ask -- as a financial analyst did -- why they couldn&#39;t sit down privately and present, jointly, a more cooked deal. Basically, Ballmer admitted that Google keeps expanding its empire and time is of the essence.&quot;Any large integration process has risks associated with it. We&#39;ve all thought about it. We could have hired [more] engineers, but at the same time the market continues to grow and the leader continues to consolidate positions and there&#39;s nothing quite like putting together two larger sophisticated R&amp;D organizations,&quot; Ballmer said.Along with the inherent opportunity to sell more ads, Nick Patience, managing analyst at The 451 Group, also sees a &quot;potential integration headache&quot; with having to integrate Microsoft&#39;s ad platforms -- AdCenter and aQuantive -- with Yahoo&#39;s. Patience is also skeptical about the possibility of merging search indexes, and believes that the search engines will most likely have to continue to operate independently. Overall, the integration work would represent for Microsoft &quot;a step into the unknown,&quot; particularly since this would be by far the largest acquisition in Microsoft&#39;s history, Patience said.Gartner analyst Allen Weiner also sees potential integration challenges, particularly because he doesn&#39;t think either organization has a powerful leader who can take the reins of the combined entity and lead it into the future. &quot;They need someone like a Steve Jobs or a Bill Gates who has the charisma, vision, technical knowledge, and consumer knowledge to lead,&quot; Weiner said.On paper the acquisition has interesting potential, but it will all come down to how the integration is carried out, Weiner said. &quot;It&#39;s all about the execution,&quot; he said. &quot;The devil is in the details.&quot;Despite numerous acquisitions over the past few years in advertising and Web 2.0 technologies, Yahoo has struggled to jump-start its business, said JupiterResearch analyst Michael Gartenberg. &quot;At the end of the day, it hasn&#39;t all worked out for them,&quot; he said.While Microsoft executives are stressing that a deal with Yahoo would give it the scale to compete with Google, wrapping the two companies&#39; diverse technologies together won&#39;t be simple, Gartenberg said. &quot;In order to get to that scale, you&#39;ve got to be able to fit all those pieces and parts together,&quot; he said.Despite the integration concerns, Microsoft has good processes in place for managing acquisitions of large companies, said Gartner analyst Mike McGuire. However, it will be key for Microsoft to quickly put a senior management team in place as Google will continue to propel ahead as Microsoft sorts out the details. &quot;They are going to have to start showing some traction, or at least a really solid vision for how they will combine the companies ... early on,&quot; McGuire said.Matt Booth, a Kelsey Group analyst, thinks that the integration challenges will be major but predicts that Microsoft will work through them methodically, starting on the back end and linking services in a way that, as much as possible, is transparent to end-users, be they advertisers, publishers, or consumers. For services that are just too difficult to integrate, they will likely be kept separate. The last thing Microsoft wants to do is drive users away, Booth said.In a research note, Citigroup financial analyst Mark Mahaney said he is skeptical that a combined Microsoft-Yahoo would improve its search products enough to affect Google&#39;s position, since they both have been losing search market share and, in his opinion, seeing a decrease in their search innovation.&quot;Given what would surely be immense integration challenges, it&#8217;s hard for us to see how a Microsoft-Yahoo combination would create a greater technology competitor to Google at least for the foreseeable future,&quot; he wrote.&quot;We could see a scenario by which Google would actually gain more market share due to industry uncertainty over the integration of the deal,&quot; Mahaney added.
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Microsoft launches Web search technology Thursday that it hopes will give it a share of the market dominated by Google. The new search engine will initially be available only on a special test site.
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Microsoft Corp. plans Tuesday to officially launch its updated and renamed Internet search engine, the latest step in a massive effort to make headway against market leaders Yahoo Inc. and Google Inc.
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While dealing logistically and technically with their overlapping online offerings will certainly prove troublesome&#160;if its bid to purchase Yahoo&#160;succeeds, Microsoft will at least have an immediate outlet for bringing more of its traditional desktop portfolio to the Web and to a broader customer base.Microsoft has been trying for more than two years to find a critical mass to adopt new online services beyond search, e-mail, and instant messaging under the Windows Live brand -- with little success. Its early MSN e-mail and IM offerings are popular enough with Web users; however, users of Google and Yahoo online services have been loath to adopt the revamped Windows Live offerings in favor of the ones they&#39;re already using.Not only could that change if the company purchases Yahoo, but Microsoft also will have a ready-made Web front end for rolling out more of its desktop applications as services, said Paul Fox, CIO of Guy Carpenter, a New York-based reinsurance company.&quot;The Yahoo platform is really what they&#39;re buying,&quot; he said. &quot;With Yahoo, they&#39;re tapping into the base culture of the Internet online community that&#39;s matured over the last 10 years. It&#39;s going to make it easier for people to take a look at and try their services, whereas before it had to be a more conscious effort.&quot;Aside from the usual raft of consumer applications&#160;such as&#160;search, e-mail, maps, and the like, Microsoft already has brought some of its many business desktop applications -- such as Office and CRM -- online in hosted, though often scaled-down, versions.Access to Yahoo&#39;s estimated 500 million visitors per month will give it a new channel to deliver what the company now calls its &quot;software plus services&quot; strategy, as well as buy the company time to bring more competitive versions of applications that were originally coded for the desktop to the Web.Indeed, in the conference call discussing the Yahoo bid Friday, Microsoft CEO Steve Ballmer made a pointed reference to efforts to shed its desktop legacy and move even aspects of its Windows OS to the Web, a trend the company started with some features in the latest version, Windows Vista.&quot;The Windows user wants to be live, the Windows experience needs to increasingly embrace the Internet,&quot; he said. &quot;There will be a Windows Live, there will be an Office Live as we continue to bring out innovations in which Office transforms and is transformed by the Internet.&quot;Ballmer also likely had the rising popularity of Web-hosted productivity software, such as Google Apps, Zoho, and&#160;Yahoo&#39;s Zimbra, in mind when considering how to Web-enable Microsoft&#39;s desktop software. So far, Microsoft&#39;s Office Live has been more of a way for small businesses to get up and running with a Web site and basic hosted business applications&#160;such as&#160;accounting and CRM; however, bringing a full productivity suite to the Web has been Microsoft&#39;s plan for some time.Microsoft also can leverage its own strength among business customers to bundle and technically link applications so that customers buy an all-in-one package rather than individual products. For instance, Microsoft has created tight links between a new unified communications product, Office Communications Server, and its Office and SharePoint collaboration software so that customers must buy them all together to create comprehensive infrastructure. Microsoft can make similar attachments between online versions of its applications -- or just bundle them together in creative ways -- and market them to a broader audience.&quot;If Microsoft does something well, it&#39;s bundling products and services,&quot; said Ned May, director and lead analyst of marketing research firm Outsell. He joked that if Microsoft purchases Yahoo, there might come a day when you start up Windows and &quot;up pops Yahoo, and it takes you three days to remove that functionality.&quot;&quot;Yahoo provides a platform in many regards -- an audience of 500 million people to which you can bundle products and new offerings,&quot; May said.Doing quick math, May figured that at &quot;500 million a month for about $44 billion,&quot; it will cost Microsoft about $86 a head for acquiring each member of its new audience of Web users. &quot;Not a bad deal,&quot; he said.
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Microsoft on Thursday will launch its long-awaited internet search service that is expected to compete with market leaders Google and Yahoo, The Wall Street Journal said.
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At first blush, Microsoft's proposed acquisition of Yahoo for $46.6 billion is about growing its consumer advertising and portal business to better compete wit Google. And that's certainly part of the mix, but perhaps lost in the discussion is how such an acquisition could help Microsoft execute its software-plus-services strategy for delivering business apps over the Internet faster and better, said several analysts. That strategy could help Microsoft compete with Google's own business-apps initiative, they said.[ Follow InfoWorld's ongoing coverage of Microsoft's offer to buy Yahoo ]"Yahoo has very efficient datacenters, as does Microsoft," noted Rob Koplowitz, a Forrester Research analyst. By combining their datacenters -- and, more important, their engineering talent -- Microsoft should be able to move faster and more efficiently on delivering business apps over the Internet, something that Microsoft has done at a fairly slow pace so far. "Yahoo's engineers can help," he noted, "And you know that there'll be engineers who are freed up" after the acquisition, should it go through."Although Google Applications have yet to make a real dent in the Microsoft Office giant, they do pose a long-term threat," said David Mitchell, a senior IT researcher at the consultancy Ovum. "As a defense against this position, Microsoft needs to accelerate its own move into online services. The online engineering capabilities that Yahoo has will undoubtedly offer Microsoft the potential to bring new services to market" and will help Microsoft stay competitive.Koplowitz said he does not believe Microsoft is trying to buy specific technology from Yahoo to fill a hole needed to compete against Google's business offerings. Microsoft wants more talent and capacity to follow its existing strategy, he said. Google's approach is to offer pure Web-based apps, which he noted are more mature than Microsoft's Web-delivered apps. Microsoft's approach is to extend its 450 million Office desktop seats through additional software delivered via the Internet. The strategies have some overlap, but because they are different, Koplowitz expects Microsoft and Google to take different technology paths rather than try to copy each other.Microsoft's acquisition of Yahoo would also bolster the company in another area where it has fallen behind Google: search, said Charlene Yi, a Forrester analyst. "Microsoft is interested in search because it provides a beachhead into businesses -- especially small and medium-sized ones that don't have a direct relationship with Microsoft," she said, as businesses typically buy Office software from retailers and resellers. Google is using search to forge those direct relationships and then offer business apps that compete with Microsoft's plans.
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Yahoo has not reached a decision about&#160;Microsoft&#39;s acquisition offer&#160;and is considering &quot;a wide range of potential strategic alternatives,&quot; Yahoo CEO Jerry Yang said in an e-mail to employees on Wednesday.In the e-mail, which was addressed to &quot;yahoos&quot; and filed with the U.S. Securities and Exchange Commission, Yang said the Yahoo board is still reviewing the deal and will &quot;take the time it needs to do it right.&quot;&quot;Our board is thoughtfully evaluating a wide range of potential strategic alternatives in what is a complex and evolving landscape,&quot; he wrote in the e-mail, typed in all lowercase letters.Microsoft made its unsolicited bid for Yahoo last Friday, offering to pay $44.6 billion for the company, or 62 percent over Yahoo&#39;s closing share price Thursday. The deal would greatly expand Microsoft&#39;s search and advertising business and could help it to compete better with Google online.Yahoo is understood to be lukewarm on the offer. The company hopes a rival suitor will emerge with a counteroffer or that it can forge a deal with Google that will allow it to remain independent, according to Wednesday&#39;s Wall Street Journal newspaper, which cited unnamed sources.However, analysts have said it is unlikely another company could match Microsoft&#39;s sizeable offer, and a business deal between Yahoo and Google could raise antitrust concerns because of Google&#39;s already dominant market position.In the e-mail, Yang thanked the Yahoo staff for staying focused on their work amid the turmoil. The company has hired &quot;top advisors&quot; to assist it through the process and is focused on maximizing value for its shareholders, he said.
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Microsoft rolled out its long-planned response to Google and Yahoo in the Internet search industry on Wednesday.
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By Kim Hart, Washington Post Staff Writer  Yahoo Inc. and Microsoft Corp. joined forces yesterday on the instant messaging front, allowing users of their systems to communicate with each other and rivaling AOL's messaging system for the top spot.
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Microsoft founder Bill Gates on Tuesday is expected to detail the company&#39;s plan for computer management software and announce a long-awaited Windows update tool.