Micro-hoo or Ya-Soft?

Probably the biggest news in the IT industry is the recent takeover proposal of Microsoft to Yahoo!.

Yahoo!, not surprisingly, rejected the offer from Microsoft on Monday, and it seems that they have engaged in active discussions with News Group to prevent a hostile takeover from Microsoft.

It actually reminded me of a Chinese movie that I’ve just watched last weekend.

In the movie, a lady quarrelled with her husband and moved out, and she regretted later on. In order to win her husband back, she actually asked a colleague of her who have absolutely no interest in her, to pretend to be her new boyfriend and showed off in front of her husband. Eventually, her husband got jealous and they two become a happy family again.

I am pretty sure that is not the only movie that talked about a scenario like that, in fact, it is pretty typical in many movies that I’ve watched. And right now, this is analogous to the takeover battle between the largest IT enterprises in the world.

Yahoo! was once the best search engine in the world, and ten years ago, many Internet-savvy users (such as myself), dig stuff that we need from Yahoo!. Unfortunately, Yahoo! eventually lost its focus, and when it finally, after many acquisitions and attempts to figure out what this company should do, it it already far behind the new born Google.

As it was mentioned by many information sources, the largest problem with Yahoo! is on its corporate culture, where, just like many other MNCs, does not really foster a sense of creativity. Many wonderful ideas were buried in the bureaucracy, and the company itself has not realized the fact that putting eggs into too many baskets is just as bad as putting all eggs in one basket.

On the other hand, the reason why Bill Gates is the wealthiest person in the world is pretty much because of the fact the Microsoft enjoys a certain degree of monopoly (although everyone in Microsoft would deny that, but how about like 80% of all PCs sold worldwide have Windows in them?) in the operating system and productivity suite. For years, despite the rise of many companies whose unwritten ambition is to take down Microsoft, no one could done that.

Not until Google, who has a search engine algorithm that even other big players in the industry admit that it is at least “one decade ahead of us”, and who have been very successful in providing the GMail services, online productivity suite as Google Docs, Google Spreadsheet and Google Presentation, and with the birth of the Android platform, it is directly putting itself into challenges with Microsoft’s Windows Mobile.

However, Yahoo! is still the second most used search engines in the world with five million Yahoo! accounts, and Microsoft still enjoys the de-facto monopoly in the operating systems.

And I do not think it takes too long for both Steve Ballmer and Jerry Yang to figure that the only way to survive is to be able to combine their strength together.

However, no one wants to sell themselves cheap, and particularly for companies like Yahoo!, who still carries the memory of their glorious past. On the other hand, Microsoft is more like a 30-year-old man who is pursuing a 50-year-old woman, no disrespect, but I think Microsoft will still consider every single penny it pays on top of the 31 dollars per share it offered would be too much for the marriage.

News Group is by no means interested in Yahoo!, although it has acquired companies such as MySpace and so on, because it does not make any sense for Rupert Murdoch to step in the hot battle zone between Microsoft and Google at this point of time, when he does not have the expertise nor the experience after the purchasing Yahoo!.

On Thursday, Microsoft announced the big senior management shuffling to get ready to take over, and rumours is that Microsoft is ready to go again with another proposal of about 35 per share.

So, time for Micro-hoo? Or Ya-soft?