A response to Daniel Eran's excellent essay over at RoughlyDrafted.

Here are a couple of things you might have missed:

I think you understate how poisonous the atmosphere at Microhoo would be, as Microsoft asks Yahoo folk to take down their life's work and replace it with Windows junk. Knowing Ballmer, I realize that would be exactly what would happen. Yahoo would become an demoralized, empty shell, with no technical employees worth talking about and a humiliating surrender to their worst enemy. When that happens, you know anyone with any ability at all is going to take the money from the takeover, and walk right next door to Google, who, by their own admission, has a major shortage of employees. You touched on this but I don't think you covered the emotional punch in the face this is to anyone working at Yahoo!

I don't even work there and I understand this.

I find it surprising that you are so skeptical that it's impossible to drive traffic to another portal/search engine if it can be made to improve on Google. Sure, Google has a huge head start and super-competent employees. But people do like to have at least a couple of alternatives, and from a technical standpoint barriers to entry are pretty low. Google came from nowhere, and although that's harder now, it's not impossible.

I wonder if antitrust concerns could stop this merger. There is so much duplication here, as you observe, that makes me think it's going to cause an undeniable reduction in customer choice. If you think of it in ecological terms, you are destroying an entire ecosystem with all of its species (customers). Fortunately the customers will not become extinct, but as you say I don't think they are likely to stay with Microsoft.

There is a lot of emotion behind this and I think you understate it. There are a lot of people, including Googlers, who don't want to see Yahoo! go down the tubes like this.

As you so rightly pointed out, most mergers don't work. I can only imagine how a takeover would work where virtually every employee of one company loathes the other.

How could anyone even dream of paying $45 billion for that?

D

Note: You will be prompted to set up an account once done with your message