Why I didn't like "Microhoo"

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Two essays jostling.

Microsoft has made an investment in MSN, and that investment has not been paying well. Search is a related source of income, and that component of the business could also be improved on the balance sheet.

The purchase of Yahoo would add the #2 search provider and a content company which has had more success than MSN. That makes the deal compelling for Microsoft.

Where does the profit come from? Advertising, not software. Though the process of monetizing content involves substantial software, the quality of the software is not the most salient issue. Advertisers purchase the most effective placements for their ads, and not the best means of interacting with the provider. Though convenience is also appreciated.


John, you're trying to conflate this discussion about MSN/Search with another discussion about the company as a platform divider. And how Microsoft must respond to the different expectations associated with new markets. That's a whole other issue, and it fits as uncomfortably as MSN fits within Microsoft.

So when you write:

Microsoft wants to beef up its advertisement platform, and I believe that to be an absolutely essential goal. The first order of business, however, is for Microsoft to discern what makes its products uniquely Microsoft products. That, I think, is the best avenue to success with its platform, even as I concede that lassoing content companies into the Microsoft ad corral is a useful and important strategy (make deals with the Facebooks of the world until the cows come home, in other words).

[End quote.]

... you look at an attempt to "beef up its advertisement" - revenues - and bring software into it.

The soul searching about platform in the future can take place no matter what deals Microsoft makes with "content companies". Yahoo is open source, so the discussions were with one of those content companies. Eventually, when comfortable for staff and customers, Yahoo will be a content company using Microsoft software.


If Microsoft were able to improve Yahoo/MSN (?) sufficiently to obtain a good price, then those assets could be sold.

But the visionary Mr. Gates, who is interested in all software-related sources of revenue, has left the company with a distracting anomaly. It may confuse the company a bit while it lasts, but it needn't confuse you.

Posted by: Anton Philidor   Posted on: 05/06/08 You are currently: a Guest | Members login | Terms of Use

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