Sharp restructuring at defeated Microsoft

Just when the Yahoo resistance to Microsoft’s appetite is strenghtened by the agreement with Carl Icahn, such a wide strategic defeat starts biting at Microsoft: now it’s Johnson, and Ballmer will be next.

See our May S&T Bulletin for the Yahoo-Microsoft long battle: 2stnews080521.

WSJ, July 24:

Microsoft’s Online Chief is Departing for Juniper


The man who led Microsoft Corp.’s bid to buy Yahoo Inc. is departing as the software giant scrambles to re-energize its struggling Internet business.

Kevin Johnson, 47 years old, will take a job as chief executive of Juniper Networks Inc., a Silicon Valley maker of networking hardware, people familiar with the situation said.

Mr. Johnson, as president of Microsoft’s platforms and services division, was in charge of both its online efforts and its flagship Windows operating system. Along with his departure, Microsoft announced a reorganization of the massive business unit.

The changes reflect deep dissatisfaction by Microsoft Chief Executive Steve Ballmer with the performance of Microsoft’s online business. The company over the past decade has invested billions of dollars into online services only to watch Google Inc. and a host of others grab most of the profits.

After 3 years of ineffectual fusion, the large Johnson’s division is split: Windows OS separated from oL services (Microsoft’s Internet search, online advertising and MSN services). Ballmer is directing himself the former, to underline how dramatic is Microsoft’s crisis after the Vista débacle.


Johnson to leave Microsoft in shake-up
Jul 24 2008 02:27
Microsoft revealed its disarray in the aftermath of its failed bid for Yahoo, announcing a major reorganisation and the unexpected departure of the executive who oversaw its offer Read more »

Published in: on July 24, 2008 at 9:14 am  Leave a Comment  
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B. News: Google winner again?





HE’S RIGHT OF COURSE,  PROBLEM IS: IS HE STILL IN COMMAND OF YAHOO? PROBABLY YES, HE IS. BECAUSE ICAHN’s ASSAULT IS FULL OF CONTRADICTIONS: by such a  mono-mania of selling to Ballman, the stupid Icahn undervalues Yahoo (against the  shareholders’ interests, he pretends to represent), he has no alternative and  – by definition – no strategic menu,  view of technolgy nor any idea of how to shape an industrial, a development plan for Yahoo. THESE IDIOT FINANCIAL MEN don’t know anything about anything.  Had this to be the last stage of the M.HOO telenovela (who knows?), all the pressing by Microsoft along 2007-08 had just the result to cut out Yahoo’s independence space, and push it into Google’s   area, withuot Google having to spend a single cent. WE WAIT FOR ICAHN TO ASSAULT MICROSOFT, AND ASK FOR STEVE BALLMAN’S HEAD …

YHOO shares (see graph below) lost 10% today, Thursday, closing at $23.52 (30% down from $33 MSFT offer).


[Go to article]      

Yahoo reached a search-ad pact with rival Google, uniting the systems of two industry giants and dealing a blow to Microsoft. Yahoo said acquisition talks with Microsoft have ended, sending Yahoo shares tumbling.  7:02 p.m.

Yahoo destroyed itself to save itself. Microsoft tried to get stronger, but only ended up exposing its own weakness. Somehow Google emerged triumphant, effectively neutralizing its two biggest competitors.

That is what makes the Yahoo-Microsoft nonmerger such a spectacular failure. Never have so few failed so many for so much at stake.

Associated Press

Consider the state of Yahoo now: Thrust into the arms of Google, it now is forced to admit it can’t develop the technology to compete head-on with the Googleplex. It is as if IBM were to admit it could no longer build a big server, or Toyota were to give up on the Corolla and start selling Honda Civics.

      Yahoo Ends Talks With Microsoft, Nears Search-Ad Deal with Google By MATTHEW KARNITSCHNIG

Microsoft Corp. has definitively abandoned its pursuit of a deal with Yahoo Inc., people familiar the matter said, opening the way for Yahoo to complete a search advertising pact with rival Google Inc. Microsoft told Yahoo it was no longer interested in a pursuing a takeover, even at the $33 per share price it offered for the Internet company last month. Shares of Yahoo plunged on the news, dropping 11%, or $2.88, to $23.27 on the Nasdaq Stock Market. The decision likely spells the end of Microsoft’s five-month pursuit of Yahoo, a deal it characterized at the time as essential to its strategy of countering rival Google. In retrospect, Microsoft’s unsolicited approach appears to have badly backfired. Instead of winning Yahoo’s huge audience and online search capabilities Microsoft has driven its quarry into the arms of its arch enemy — Google. The deal unraveled last weekend, at a meeting between Yahoo directors and Microsoft representatives. At the meeting, Microsoft made it clear that it was no longer wanted to pursue a larger deal, the people said. The two companies have been in discussions in recent weeks over an alternative transaction that would have involved Microsoft acquiring Yahoo’s search business but Yahoo concluded that such an arrangement was unworkable. The company now plans to pursue a search advertising pact with Google, a deal that could be announced as early as today. Details of the plan weren’t immediately clear but the two companies have been discussing a deal under which Yahoo would outsource its search advertising to Google. Analysts believe such a deal would significantly increase Yahoo’s cash flow because Google’s system generates significantly more revenue for each search query than Yahoo’s does. Write to Matthew Karnitschnig at  

update of this article:

Published in: on June 12, 2008 at 11:28 pm  Leave a Comment  
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Googhoo or Micrhoo? Search ads monopoly or duopoly?

A LUCKY DAY: 3 concurrent BNs !!!

BREAKING NEWS 1: download S&Tn 2

Today’s 2stnews080521 no.2 Science & Tehnology newsletter, focusing on Yahoo and IPRs.





OBJECTIONS and ALTERNATIVES from a  number of blog posts in TechCrunch (we read hundreds of pages, and found them by far best value, together with breakingviews sempre primo della classe). Our synthesis:

FAQ 1. If the strategy is Facebook, to make it a sort of “gated community” (Robert Scoble’s alarming hypothesis), then what for Yahoo? Only Panama costs $20 bn (Citigroup estimate) 

FAQ 2. If MSFT now focuses Life Search Cashback, what for:

a) Facebook? Certainly not for above $10 bn;

b) Panama? You just buy Yahoo Asia and  the ad search business, without the software, because you desperately need CRITICAL MASS.



After years of passive innovation, is Microsoft about to  break in search technology and its business model?

“The big news this week may actually be Microsoft’s upcoming announcement at Advance08. (…) I’ll be at the event and live blogging, so stay tuned.” Michael Arrington at

I know it wasn’t nice, but I asked Google Search about  “Life Search Cashback“, it gave me all the list (people blogging from the Advance08 Conference today) but also asked me whether I actually meant “Life Search cash back” (I wanted to tell him, but not yet interactive: “sorry Engine, I understand you know the dictionary and you’ll learn more: but I was right”).

MORE  IN OUR ST Newsletter no.2: 2stnews080521 

WHO’S AFRAID OF (an independent) YAHOOLF?

NOBODY. It just happened: it was taken in between Microsoft and Google, in their global wars 1.0  – january 31 to may 15 2008 – and 1.1 (now). Google won the first run, but now it’s different.

April ‘o8 search shares:  62% GOOG, 17.5% YHOO, 9.7% MSN (MSFT), 4.3% AOL, 2.1% (Nielsen data).

Users april ’08: 128 million G., 122m M., 117m Y., 105.5m Time Warner (AOL). Nielsen data.

US Searches same month – source Hitwise: 67.90% G, 20.28% Y, 6.26& M, 4.17% MSN loosing ground from March to April, according to Hitwise.

1Q08 (4Q07) spending by US search advertisers: 70.4% (74.5%) G., 24.2% (19.6%) Y., 5.4% (5.9%) M. (NYT from SearchIgnite). Yahoo eroding Google’s share, according to this source.

Trendy Google

ANSA – MILANO, 30 APR – Google diventa trendy: alcuni artisti realizzeranno temi grafici con cui arricchire l’homepage personalizzabile del motore di ricerca. Oltre agli ‘skin’ iGoogle consente di scegliere una serie di contenuti dinamici da visualizzare, come meteo, notizie e Borsa. Le creazioni artistiche portano la firma di Dolce&Gabbana, dei gruppi musicali Beastie Boys e Coldplay, dell’interior designer Philippe Stark, dei fotografi Anne Geddes e Yann Arthus-Bertrand e dell’artista Jeff Koons.

Google becoming even more trendy through iGoogle skins about to be created by artist and designers.

We are with Adam Smith against any monopoly (we just wrote on April 25th blog post: even an eventual Madonna Aparecida’s one), and will always stand by this tenet. We see here some Schumpeterism as well: the best is the best. The Microsoft-Yahoo saga is at a turning point: a Microsoft deadline just expired, and the WSJ reports some possible division in the Seattle giant top management. More on this next week, in the May edition of our monthly S&T Newsletter.

On Monday, April 21st the FT published the yearly report on Global Brand Equity; we have been analyzing and discussing it the day after, in the Industrial Economics classroom. The breaking news is a 2006-08 take off of Chinese oligopolies’ brand capital, e.g., taking the world 3rd, 6th and 7th rank in Finance (even if data have been adjusted for the 2007 “Shangai bubble” in the stock market).


1 Google 86,067 $m, 4.4% of world total

2 GE 71,379 $m, 3.7%

3 Microsoft 70,887 $m, 3.6%

4 Coca – Cola 58,208 $m, 3.0%

5 China Mobile 57,225 $m, 2.9%

HIGHEST 2007-08 growth: +390% BlackBerry, +123% Apple, + 93% Amazon, +82% China Construction Bank, + 75% Vodafone.

The Microsoft-Google armageddon: or is it desperate webwives?

la resa dei conti: a spaghetti-western, music by morricone

The google-microsoft armageddon animated by yahoo latest agitation, just before death

The news (sing the classic: Yahoo killed the media stars …)

Internet, media stars line up for Yahoo – Yahoo News from AP. April 10, 11:05 AM ET

SAN FRANCISCO – Yahoo Inc.‘s last-ditch efforts to avoid a takeover by Microsoft Corp. appear to be setting the stage for a dramatic finale featuring a rich cast of Internet and media stars.
Yahoo CEO Jerry Yang (Las Vegas, Jan. 7)

Yahoo CEO Jerry Yang poses for a photo in front of the Yahoo booth at the Consumer Electronics Show in Las Vegas in this Jan. 7, 2008 file photo.  Internet icon Yahoo Inc., under pressure of a three-week deadline from Microsoft to accept its $41 billion buyout bid, on Monday, April 7, 2008 said it doesn't oppose a deal with the world's largest software maker but wants a better offer. (AP Photo/Paul Sakuma, file)

1) Yahoo and AdSense: a NonSense.

Yahooannounced today that it will begin a limited trial using Google’s AdSense for Search program in its search queries. The deal will apply only to traffic from in the US. The test is expected to last for up to two weeks and will be limited to no more than 3% of Yahoo’s search traffic. Even so, just before being absorbed, they admit being so weak in their core business and strategic technology (!!! ??? !!!). What for? to undersell to Microsoft? They must be just crazy.

2) Yahoo and AOL:

They are close to an agreement to combine their Internet operations, according to the WSJ. Time Warner, the parent of AOL, would reportedly inject the unit and an unspecified amount of cash in exchange for a 20% stake in the combined entity. The agreement would value AOL at $10bn, but would not include the group’s declining dial-up business. Yahoo would then buy back several billion $ worth of stock, at a price between $30 and $40 per share, now traded at $28.50.

The comments

Last battles this week, the Yahoo saga of the multi-saga Armageddon is very close to an end:

– after a battered, defeated, masochist, even incapable of introducing a new version of its stupid and useless OS (producing all their anti-Schumpeterian rents: that is, monopoly rents derived from their anti-innovation and obscurantist policies), a strategically retiring Microsoft’s hyper-desperate move (its $44.6bn Yahoo bid),

– now it’s Yahoo’s turn being so desperate, really crazy and crying (grasping A0L, Google, and whatever else is at hand, in order not to fall into Bill Gates and Steve Ballman’s voracious mouths). The telenovela IS N0W: DESPERATE WEB2 HOUSEWIVES. Just Google, at the moment, keeps nerves under control: but not forever. Since, as Yahoo’s desperation is up, & their escape solutions down, Google will go crazy too, at the idea of one battle won by Ballman.

This and much more from news:

a) jeff segal: Steve, throw in a few dollars or make the bid all-cash, and this deal is yours. b) robert cyran: scorched internet. If this is all Yahoo’s got, it’s not much … and TV today: Apr.10, Google & News Corp. B.views justintime! This is a Guinness: Google-Microsoft armageddon on Yahoo battlefield in just 53″ !!!

Basics: No Competition authority might ever approve a 90% ad-market share in Google’s hands

More from them, in our static page: weekly breakingviews. These weekly videos are accessible and updated also here, as well from their original site, and from iTunes.

o8\o4\11 The Weekly View, Apr. 11

1) Ed Hadas; good and bad news from housing markets; as for the latter, there will be another -15% in house prices 2) Alan Greenspan’s self defense? No, thanks! He, alone, was 30% responsible of this disaster. According to IMF guys, who aìhave adopted Roudini’s estimate this week, this makes a public damage of $300 bn (NOTE. The last free market ideologue is definitely rejected out of history: à la poubelle, à la poubelle. But he must pay the bill, before going out)