Microsoft are going to buy Yahoo!. No way this isn’t going to happen now. Shareholders will love it and the only place where the combined company might trouble competition authorities is in webmail - which they don’t care about.
Microsoft have just bought one great big heap of trouble. Tens of thousands of FreeBSD boxes running PHP. They found digesting Hotmail famously hard. Yahoo is going to be way harder.
Microsoft’s motivation here has to be the growing, and obvious, realisation that they are incapable of competing with Google in their current form. Google are full of smart new ideas and they manage to pull enough of them off to be a truly innovative company.
Microsoft, OTOH, are culturally incapable of innovating. They haven’t ever invented anything new, and I don’t see that changing.
(A long digression. Clearly any sort of software development involves innovation somewhere. So when Microsoft copied VisiCalc to make Excel, yes there was some innovation. Same when they copied the PARC UI to make Windows.
In a January 2001 article, The business of software: the laws of software process, there’s a discussion of process in software, and where it works, and where it doesn’t.
The interesting bit of the article uses levels of ignorance to evaluate where process works - the more ignorant you are about a subject, the less process is applicable to it.
If you sort of take the reciprocal of this idea you get a structure for levels of innovation. The greatest innovation happens where you know nothing, where you have to invent the problem space itself, or perhaps even the basic terms of reference.
Google really grok this. Nobody out there was saying ‘hey, what I really need in my life is a zoomable, rotatable model of the Earth!’. Even less was someone suggesting they’d pay for it. Yet Google Earth is probably one of their most valuable properties in the long term (honest).
Now back to your regularly scheduled transmission).
Microsoft are good at taking requirements they understand from people in business they understand, and delivering pretty good applications. And then screwing them for every last penny they possibly can. They’re just a great big boring old software shop.
From Powerpoint to the DRM hydra that is Vista, they’ve got a clear picture in their head of the Dude in a Suit that they’re aiming at. Bully for them. However Microsoft Powerpoint does not the Interweb win.
From a Microsoft analysis (remember, the only people they really care about are Dudes in Suits - the rest of us are NPCs) what they need to beat Google is scale. If only they get enough eyeballs, some of them will be Dude in a Suit Eyeballs who might buy Microsoft Visio 2008 Dude in a Suit Edition. Yahoo gives them eyeballs, some of which indeed might be tricked into buying a Microsoft product, perhaps whilst drunk or distracted or operating heavy machinery or something.
They certainly don’t give two hoots about some of the really spiffing technology Yahoo have. It would be insane to try and move all of Yahoo onto a Windows platform, but I think that’s just what they’ll do. It’s like the biggest case of cognitive dissonance ever. “We bought Yahoo because they were better than us and we really needed them… but our software is better! hell yeah!”
Where they’ve got a parallel product they’ll port the data and the users to their own product (i.e. Hotmail) and shut down the Yahoo offering (Yahoo! Mail) - even when the Yahoo offering (Yahoo! Mail) is the best available anywhere.
Like John Gruber says, the weird boutique items (Flickr) will be sold off or spun off. Not enough Dudes in Suits use Flickr, and the opportunity for selling them Office upgrades is limited. They are mostly filthy mac users anyway.
I have to think this is going to be a slow train crash, punctuated by the screams of loyal Yahoo users as they flee. If I were a Yahoo shareholder I’d take the cash and put it straight into Google.
The best quote I’ve seen (via Daring Fireball) is from Andy Baio: It’s like tying the Titanic to the iceberg. It’d keep you from sinking just long enough to freeze to death.
Well it’s going to be messy as you say. I’m interested by the innovation argument.
None of these thoughts are fully formulated, but I’ll just let them tumble out here for a moment:
1) Google bought Google Earth from an external company (Keyhole)
2) Google maps is basically a copy (but with a great implementation) of Microsoft Terraserver
3) While there is earlier source material of course google docs is the Office suite online
4) Google search is a better implementation of Altavista search
5) Mail is mail is mail is mail (but better implemented)
6) I read this week (from an article in 2005 by Malcom Gladwell) Joel Spolsky saying that all of open-sources successes have been from people “doing what we would call chasing tail-lights.” Suggesting that there hasn’t been great innovation per-say in open source, and the greatest successes (Linux, Firefox, etc) have come when people are re-implementing an existing product. - Obviously a part of this argument is baloney.
7) I’m wondering who is doing the innovation if it’s not open-source, and it isn’t Microsoft, and it isn’t google? It can’t just be Apple surely.
So what on earth is my point?
I think that people are too hard on Microsoft. There is innovation there, Photosynth for example is a great project which has oddly been stuck because they couldn’t work out a way to get access to Flickr’s pictures - I guess that problem will go away.
The essential difference between the two companies is implementation. It seems to me google’s response is always to remove anything that isn’t absolutely necessary. Like the UI guys are saying you’ve got 5 buttons, better make all of them important. Microsoft definitely don’t understand less is more.
That coupled with a failure to understand perpetual beta means that Microsoft is in some real trouble. And Yahoo doesn’t understand either.
It seems to me both Yahoo and Microsoft have business people in charge. Whereas google is led by the developers. Perhaps that’s the crucial difference for success.
Sorry for the length of the ramble.
I didn’t realise Google bought Google Earth from someone else, although now you mention it I fear I just forgot. A good point. I guess my point about Google Earth isn’t that it’s the globe itself, per se, that’s interesting, it’s their intentions for it as part of their overall ’search the world’ concept.
Their search engine isn’t just a re-implementation of Alta Vista either - right from the UI through to the implementation it’s chock full of real inventiveness. GFS and MapReduce, for example, is a genius solution.
Mail is not “mail is mail is mail”. Providing people with gigabytes of free storage was mould breaking, as was their use of a Rich Interface to steal an application previously thought of as a foundation of a desktop.
Spolsky has a temperamental dislike to Open Source, because of his old employer. He’s written some fascinating stuff, but he’s dead wrong on this one.
There really is a fundamental difference in approach and ethos between Google and Microsoft, and it shows throughout everything they do.
I agree with everything you’re saying really.
I didn’t really mean to get into all of the Microsoft vs. Yahoo stuff. I sort of strayed back onto it. I was aiming to talk about the innovation question. The crucial difference to me is the difference between google mail, facebook and myspace.
There is masses of innovation in google mail from a technical standpoint, but effectively it is a re-invention of an older concept. It is executed better of course. And the technology is amazing. (Aside: But am I not right in thinking that most of the Ajax technology was developed by Microsoft for their web version of outlook). Microsoft completely misunderstood what was important to the customer of course like they always do so it wasn’t widely co-opted. The disk space issue was an amazing technical breakthrough, and changed the game - I totally agree.
Myspace I guess (although there might be an earlier version) invented the social application. Same deal as Google Earth. They are new applications where users say, “I didn’t even know I needed this before”. Myspace is a horrible horrible mess which looks like a Microsoft product to me. Facebook comes along and says, “here it is done properly”, and normal users can come in and use it. Although every time I see a zombie I think it seems more and more like a situation which needs rescuing by google.
What I was aiming at getting at is that “innovation” is kind of about two different things. “A new idea” and “A new way of doing something that existed already”.
I mean the even just PageRank was such a technological breakthrough it was breathtaking. But to users google was a “better search”. Facebook is “a less cluttered, more private, much better social-network thing like MySpace”. But what is MySpace like? What is google earth like?
I think those kinds of developments rarely happen inside an organisation (they rarely happen anywhere I guess). Organisations tend to see things that already exist and say, “can we improve it enough that we own that space”? Rather than thinking of totally new spaces. Those tend to be done externally and bought in.
ps. I think second to the purchase of Keyhole, will be the purchase of Jaiku. I think that was a great move by them
pps. You’re extra right about Joel - anything that he says that has anything to do with Microsoft has to be taken with massive gobs of salt, I didn’t realise that he was effectively doing a reverse Microsoft reference there.
Did you see that nice Mr Fry on the virtues of the Eee this morning?
http://stephenfry.com/blog/?p=39