Tech Your Universe

I’ve seen a few blog entries lately from others saying "I’m so glad that Yahoo rejected the Microsoft offer." This is far from accurate, the offer was only the beginning. Here is a compilation of the current options that lay before Microsoft (MSFT) and Yahoo! (YHOO), based on all of my research. This isn’t a report — it’s a collection of my thoughts. First, some important facts.

Important fact #1 - Since Yahoo! is a publicly traded company, the Yahoo board has to make decisions based on short term shareholder value, not necessarily what is right, what is good for Yahoo!, what employees (including themselves), or what is good for the Internet as a whole.

What does this mean? Well, as much as Jerry Yang loathes the idea of his company being taken over (those are my words, not his), he is obligated, by law, to "act in the best interest of shareholders". That’s why whenever a CEO gives a speech, you’ll notice that they will always include the line "maximizing shareholder value".

And what if he doesn’t act in shareholders best interests? Then shareholders sue. There are currently 7 Pending lawsuits against Yahoo over their handling of the Microsoft deal. Jerry is damned if he does, damned if he doesn’t. Remind me to never take my company public.

Important fact #2: Just because YHOO rejected the offer, that doesn’t mean it’s over. Microsoft made it clear in their initial offer that they would get nasty if they needed to. From Steve Ballmer’s original offer:

…
Depending on the nature of your response, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo!’s shareholders are provided with the opportunity to realize the value inherent in our proposal.
…

Translation: You can do this the easy way, or we will take you by force.
The day after Jerry rejected the bid, Microsoft hired a "proxy firm", which will lobby the shareholders to overthrow the board, one of the first steps in a hostile takeover. Microsoft is making it well known that they will be hostile if need be.

Important Fact #3 - Jerry can’t simply say "No", he has to do something that will get the stock price up. See #1. He has to act in shareholders best interests. In Jerry’s rejection of the bid, he states that $31 "substantially undervalues" Yahoo!, which leaves the door open for Microsoft to come back with a higher offer. But since the stock will slowly drop back down to $20, he has do to something.

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So what can happen now? Let’s look at some scenarios.

Scenario #1 - Microsoft accepts the rejection letter and walks away. Yahoo remains an independent company.

Pros:

1. Both Yahoo! and Microsoft remain *better* positioned to take on Google by themselves. See Exploding the Microsoft-Yahoo-team-up-against-Google myth on why the combined companies would be worse off.
2. Microsoft saves $44 billion for something else. Perhaps a donation to the Gates Foundation would help Microsoft offset some of its bad karma
3. Yahoo remains a place where Yahoos would like to work.

Cons:

1. Yahoo’s stock price is artificially inflated right now because of the Microsoft offer at $31/share. If the offer is withdrawn, the stock will likely plummet to what it was before the offer (~$20/share). Ouch!
2. Steve Ballmer’s attempt at building a legacy of his own failed, and since he will win at any cost, he’ll set his sites on something else. The rest of the world should watch out.

Likelihood:
Not very likely. 5%. Why? Because the shareholders of Yahoo! will force Jerry’s hand. Since the stock will be at $20/share if Microsoft withdraws their bid completely, if Jerry can’t come up with a compelling plan to get it to $31, shareholders will overthrow the board and force Yahoo! to accept the offer. Isn’t corporate America great?

Scenario #2 - Yahoo! finds a white night. Some other company steps in and buys Yahoo! instead, keeping it out of Microsoft’s hands. Rumored possibilities have included:

1. News Corp. WSJ report
2. Google. NYT report
3. AOL/Time Warner
4. Comcast
5. NBC

Likelihood:
Low. 10%. Most press states that these "white knight" rumors are mostly a negotiating tactic on Yahoo’s part to get the bid raised. It’s their way of showing the world that they have other options, and don’t need to take the Microsoft offer.

Scenario #3 - Microsoft raises its bid. Since the first bid of $31 "substantially undervalued" Yahoo! according the the bid rejection letter, if Microsoft raises its bid, then the Yahoo board will have to reconsider.

The interesting question on scenario this is surrounding the timing. When will they do it?

1. At the 11th hour, before the hostile takeover. I personally don’t think that either company wants to go through the motions of the hostile takeover. It’s messy on both sides. It makes sense for Microsoft to threaten the hostile takeover, then at the very last minute, when it looks like Yahoo!’s days are over, Microsoft steps in with an offer of $33-$40, and the board accepts, with no other better options.
2. Microsoft can just wait. As time passes, Microsoft position increases. Yahoo! will be under more and more pressure to come up with an alternative to Microsoft’s bid. When the stock is at $20, they can step in and offer $25, and the board may have no choice. However, there may be other incentives for Microsoft to hurry this along, such as regulatory approval and the upcoming election.

Likelihood:
High. I say 75%. Again, the real question is when.

Scenario #4 - Some other scenario that no one else has talked about. The wildcard. The crazy ass option that will just save the day and keep everyone happy. Do you know what it is? Please leave a comment.

Likelihood:
Low: 10%.

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If Microsoft is successful in its hostile takeover attempt, there are still regulatory hurtles. Even after the deal is approved by both companies boards, it still has to pass anti-trust approval in the United States and European Union. Microsoft specifically addressed this in their initial offer:

…
We have dedicated considerable time and resources to an analysis of a potential transaction and are confident that the combination will receive all necessary regulatory approvals.
…

But this crazy. Everyone knows this will be a huge uphill battle. Microsoft isn’t exactly in good standing with the European Union right now, after just being fined 1.3 billion for even more anti-competitive practices.
And After Microsoft put Google through hell on Microsoft anti-trust issues for Doubleclick, Google has hinted that they will be doing the same. This deal will take many months (years?) to gain the necessary approvals, and the structure of the deal may be shifted to comply with the law.

It looks highly likely that Yahoo will fall to Microsoft. Anyone else have any ideas on how this can transpire? I’d love to hear comments.

Helpful Sources:
Full coverage of Yahoo-Microsoft on news.yahoo.com
Alleyinsider.com

My recent blog posts on Microsoft’s Hostile Takeover of Yahoo have painted me, to some, as an open-source zealot, which maybe I am. However, there is another reason why Yahoos won’t work for Microsoft. It’s because of Microsoft’s history of anti-competitive business practices.

I wrote this as a one-liner before, but I decided to expand on this a bit. First, let’s look at the definition of competition. From dictionary.com:

1. of, pertaining to, involving, or decided by competition: competitive sports; a competitive examination.
2. well suited for competition; having a feature that makes for successful competition: a competitive price.
3. having a strong desire to compete or to succeed.
4. useful to a competitor; giving a competitor an advantage: He was careful not to divulge competitive information about his invention.

In business, competition drives success, which — ultimately — benefits consumers. The Bureau of Competition seems to think that American companies should avoid monopolistic practices. Karl Marx didn’t agree. And there are plenty of others that would say that government shouldn’t be involved in such matters.

Through all of these different stances on competition — they all agree that fair play is a must, or consumers suffer. Ok, check, most people would agree that healthy competition amongst business is good for consumers. So now what are some anti-competitive practices? Wikipedia serves us pretty well here: http://en.wikipedia.org/wiki/Anti-competitive_practices

From this page, I took a list of practices, and then we will see if Microsoft has done with each of these.

Action	Description	Microsoft?
Dumping	Where products are sold into a market at a low price which renders competition impossible, in order to wipe out competitors.	No examples found
Exclusive dealing	Where a retailer or wholesaler is tied to purchase from a supplier.	Yes. Microsoft works out exclusive deals with hardware manufacturers to lock them into selling Windows, and only Windows, on desktop machines.
Barriers to entry	(to an industry) designed to avoid the competition that new entrants would bring.	Yes. Entering the PC Desktop market is very difficult because Microsoft Windows has interoperability challenges with other Operating Systems. Some consumers stick with Microsoft Windows because they feel they have no choice if they want to use all of their programs, and this market share dominance prevents competitors from easily introducing new, competing operating systems that would benefit consumers
Price fixing	Where companies collude to set prices, effectively dismantling the free market.	Yes. The European Union seems to think so, after just fining Microsoft 899 million Euro for its practices
Refusal to deal	E.g., two companies agree not to use a certain vendor	Yes. According to this paper, the European and Microsoft anti trust cases cited "refusal to deal"
Dividing territories	e.g., you get everything west of the Mississippi, we take everything east	No examples found - not really applicable to software
Limit Pricing	Where the price is set by a monopolist to discourage economic entry into a market.	Yes. Windows is bundled with hardware at reduced pricing, sacrificing short term gains for longer term market share and profit from other software such as Microsoft Office, raising the barrier of entry for competition.
Product tying	Where products that aren’t naturally related must be bought together; this prevents consumer choice.	Yes. Two words. Internet Explorer. See full details on the Microsoft Anti-trust case in the U.S. and EU
Resale price maintenance	Where resellers are not allowed to set prices independently.	Yes. To be fair, this is common practice
Coercive monopoly	All potential competition is barred from entering the market	Yes. Reference above or below examples.

In looking at how many anti-competitive business practices Microsoft employs, we can see why Microsoft is a quintessential example of an anti-competitive company. Still not convinced? Let’s look at some specific notable examples in Microsoft’s history.

Case Study #1 - Microsoft vs. Apple, through anti-competitive business practices, Microsoft dominates it’s way to large market share to become the largest software company, even though Apple had a better product.

Case Study #2 - Microsoft vs. Sun. In an attempt to kill Java, Microsoft stops bundling Java with Windows

Case Study #3 - Microsoft vs. Netscape/AOL. Microsoft employes anti-competitive business practices to take over the browser market, going as far as intentionally crippling Netscape in releases of Internet Explorer. The United States Government steps in and penalizes Microsoft.

Case Study #4 - Microsoft vs. Linux via SCO. SCO receives investment help from Microsoft, and suddenly SCO sues effectively the entire Linux community with the new found funding, spreading FUD everywhere for businesses running Linux. Interesting coincidence.

Case Study #5 - Microsoft vs Real Networks. They settled a suit in 2005

Case Study #6 - Microsoft vs Novell. They settled a suit in 2004

Microsoft has an insatiable appetite to win, at any cost. They play dirty, and seem to disregard the moral implications. They’ll trip you in a foot race, foul you in basketball, or bite your ear a boxing match. All in the name of winning. Now the key question: When does the desire to win become unhealthy?
My answer: When it compromises your integrity.

I have four kids, and although I’m not perfect, I try very hard to lead by example. Among other things, I teach honesty and integrity as a core principal. My kids know that integrity is more important than winning. In my opinion, Microsoft has shown that winning is more important than integrity.

Having integrity as a core value is a critical factor in me choosing what kind of company I want to work for. How then, can I have a position where morality and integrity are so important to me, and work for Microsoft?

The answer: I can’t. And I won’t.

Update on March 28th: I’ve decided to leave Yahoo! because of the impending Microsoft takeover.

With a certain percentage of Yahoos unwilling to work for Microsoft, recruiters are in a feeding frenzy. They know that this is a great opportunity to snatch up employees that would have otherwise been perfectly content with Yahoo! for many years to come.

Break off into a quick tangent to dispel a myth — Some may say, what about the Change in Control Severance Plan that was put in place to "line the pockets of Yahoo! employees"? Well, in my opinion, it does not benefit most Yahoo employees as the media would have us believe. Some may think that this is incentive for Yahoos to stay. However, it only kicks in if Microsoft fires Yahoo employee, or the Yahoo employee leaves for "Good Reason", ie, if they ask Yahoo employee to relocate to Redmond. Does "Good Reason" include the moral conflict of working for a company with a history of unscrupulous business practices? Apparently not, but that’s another story that I won’t discuss publicly.

</tangent>

Anyway, back to Pavlovian recruiters. In a less-than-scientific-completely-informal survey, a co-worker in a nearby cube says he has received 8 phone calls and 2 invitations from LinkedIn in the last two weeks. I just counted 19 e-mails, phone calls, or LinkedIn invitations I’ve received in the past two weeks. Search engine traffic to my resume has gone up 300% in the past month. In looking at the keywords that users are searching for to find my resume in the last few days, there are some interesting findings. Note how much "yahoo" is being searched on:

nick sullivan yahoo
software architect sample resumes
"my resume" and (nyc or "new york") and ("java programmer" or "software programmer" or "database design")
"nick sullivan" resume
"technical yahoo" php perl mysql
(intitle:"resume for" | intitle:"resume of") (programmer or programer or developer) framework
architect resume
chief software architect resume
css ajax web content develop (inurl:resume | intitle:resume) 94000..95000
database and engineer and architect and php (intitle:resume) 94002..95196
database engineer architect php (intitle:resume) 94002..95196
evox sunnyvale
intitle:resume inurl:resume network engineer "load balancing" "new york"
lead software architect resume
nick sullivan resume
php resume santa clara
project manager resume, automotive
resume builder software architect
resume yahoo maps development lead
resumes+php developer+ct
sample cv of software architect
sample resume of a chief software architect
technical architect and resume and new york
yahoo php developer resume
yahoo sunnyvale resume

Now, the deeper question. What does this mean for Yahoo!? What does this mean for Microsoft? This can’t be good for Yahoo, and it’s not good for Microsoft either, even if the hostile takeover fails. Why? Let’s take a look.

• Yahoos are going to to Google — Where are the Yahoos that leave disgruntled most likely to go? Yes, that’s right, they will go to the very competitor that Microsoft is supposedly teaming up with Yahoo to beat! Great job Microsoft, you are kicking the best talent from your #2 competitor to your #1 competitor. Yet another argument that debunks the team up against Google myth.
• Yahoos are going to startups that will compete with Microsoft — Freed from the burdens of getting work done in a large company (read: it’s ok to hack things together at a startup), innovation will explode. And when they get there, will they call up and recruit their former Yahoo! co-workers? You bet they will!
• Yahoos are forming start ups of their own that will compete with Microsoft — I’ve been approached by 2 different Yahoo co-workers that are starting companies of their own, ideas that have been lingering for a while but were jump started because of the Microsoft threat. One is an online payment system (I can’t say more), and the other is a meta search for travel. These 2 people were otherwise content Yahoo employees that would have gladly continued their employment.

The climate in the Bay Area seems more frenzied than I’ve seen since 1999. With new startups being formed and existing startups being flooded with good talent, we are about to see a surge in innovation. We should see some very interesting products and ideas hit the market in 3-6 months.

Microsoft’s president of the Platforms and Services Division sent a note to Microsoft employees about the Yahoo deal. From his perspective, they are just waiting for the deal to close.

Henry Blodget at alleyinsider.com did a great job of decoding the e-mail, it’s an interesting read. Summary

* Looking forward to beginning negotiations with Yahoo soon
* Will begin detailed integration planning as soon as Yahoo caves
* Can’t actually integrate until deal closes (still 2nd half of this year)
* Lots of people will be canned, but we will try to find other jobs for the good ones
* Yahoo’s brand is strong, so MSN and other Microsoft Internet brands toast.
* Yahoo doesn’t use Windows–but we’ll quickly fix that
* We’ll probably keep some of Yahoo’s buildings in Silicon Valley
* Don’t schmooze with your Yahoo friends: Until Jerry caves, they are enemies
* Now stop daydreaming and get back to work.

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BusinessWeek reports that there is a surge in mergers and acquisitions right now because of the pending election. Interesting.

In particular, Obama reportedly plans to take a strong stance on antitrust issues:

Obama criticized the Bush Administration for "the weakest record of antitrust enforcement of any administration in the last half century." He pledged to "reinvigorate" enforcement, and cited health care, including the insurance and pharmaceutical industries, as a sector where the lack of competition has raised prices for consumers.

Hmm. I’m starting to like this guy, even though I don’t think he will win. According to the article, democrats are more supportive of anti-trust legislation than republicans, which is consistent with the two parties’ respective views.

Jerry Yang, here is a new tactic for avoiding a Microsoft hostile takeover: Stall until we have a Democratic President.

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Microsoft today announced that they were going to be "opening up" their platform.

Microsoft today announced a set of broad-reaching changes to its technology and business practices to increase the openness of its products and drive greater interoperability, opportunity and choice. These changes are codified into four new interoperability principles and corresponding actions: 1) ensuring open connections; 2) promoting data portability; 3) enhancing support for industry standards; and 4) fostering more open engagement with customers and the industry, including open source communities.

More info here.

My take?

This is a good step in the right direction, even if it’s just talk. It helps address the "Key reason #1″ on the list of reasons why Yahoos won’t work for Microsoft.

To that end, very strategic timing. Could they be trying to make Yahoo employees feel better about their historical anti-open source stance?

With this news Microsoft gets 10 goodness points.

From an analysts perspective, I keep reading that the Microsoft Yahoo merger will allow "Microsoft and Yahoo to team up against Google". From a 30,000 foot view, this may make sense. As a Yahoo employee, I’m writing to postulate that it will make the situation worse for both Yahoo! and Microsoft. Let’s take a look. Disclaimer: These are my own opinions based on watching Yahoo and Microsoft for years. I don’t have any "inside information" that would allow me to make a better decision than any other outsider that closely watches both Yahoo and Microsoft.

There are several key issues that will be introduced by from merging Microsoft and Yahoo. First during the integration process, and then considering the state of the unified company after the merger is complete.

Key issue #1 - Integration challenges.

1. 14,000 Yahoo! employees. 75,000 Microsoft employees. I wouldn’t want to be on the Human Resources team responsible for pulling this together.
2. Two vast global technology infrastructures, using diametrically opposed architectures. Both sides will think that the other should rewrite everything.
3. Two different styles of software development that will clash. Yahoo! is used to a web based approach, Microsoft is used to shipped-software.

Microsoft estimates 1 billion dollars a year savings in "operational efficiencies". Instead, I predict it will cost more than that to merge, with tangible and intangible costs, and it will be two years before the integration is complete enough to be palatable for both Microsoft and Yahoo! employees.

Key issue #2 - Anti trust hurdles
After Microsoft put Google through hell on Microsoft anti-trust issues for Doubleclick, Google has hinted that they will be doing the same for Microhoo. And how can you blame them? Special areas of consideration:

1. Instant Messenger - Yahoo Instant Messenger (#1) and MSN Messenger (#3).
2. E-mail - Yahoo Mail #1 - MSN/Hotmail #2.
3. Online News - news.yahoo.com (#1) and MSNBC, #2.

And there are more. You can bet there will be months of reviews and pain surrounding this issue, the time spent on anti trust issues will distract both companies from their core competencies for quite some time.

Key issue #3 - Resources aren’t the problem. This one is the surprise for most. Let’s ask ourselves, why is Google #1 in search traffic? Why has Microsoft, with all the resources imaginable, and even going as far as paying for traffic, remained a distant 3rd? I can’t possibly answer this question here, but I can confidently say that the problem is not a shortage of cash or employees. Neither company is saying "If I only had 1 billion more dollars, or more people, we could spend it and beat Google". If it were that easy, they would have done it already! There are reasons why Yahoo! and Microsoft have been unable to catch Google in Search, but it’s not about resources, and a combined Microsoft-Yahoo! effort will not be better positioned to take on Google.

Key issue #4 - Impact on Yahoo talent Hiring top quality engineering talent is already difficult enough, especially in the Bay Area. Who would possibly want to go work for Yahoo! right now, given all this uncertainty? Much of the top talent at Yahoo has already voiced their concerns, many have said that Yahoos will leave altogether. Even for those that decide to stay, the morale impact of going through a hostile takeover has to be unsettling.

So now the key question. What does Microhoo look like when this is all over with?

1. A slower, less nimble company that still doesn’t have what it takes to beat Google. Processes will become even more monolithic than they already are, and Google will increase it’s lead even faster.
2. The combined entity will face a talent shortage because key Yahoo! talent has left in disgust, and new talent will be harder to obtain moving forward because they will refuse to work for Microsoft.
3. Two years of lost focus, effort, and energy dealing with integration challenges and anti-trust issues; meanwhile Google, unburdened, has spent all of it’s energy on product development and jumped two years further ahead.

Is Google worried about a Microsoft/Yahoo team up? No. This is the best thing that they could have hoped for. If I worked at Google (cough), I’d be dancing in the streets of Mountain View.

Steve and Bill, I think it’s time to reconsider.

I work for Yahoo! (YHOO), and I have had to explain to a few people recently why the Microsoft buyout talks are so troubling for Yahoos. They don’t seem to understand the severity of the impact that a Microsoft takeover will have.

There has been a lot of talk about "cultural differences" between Microsoft and Yahoo!, and analysts seem to trivialize this as just a difference in the level of professionalism or "fun" at the respective companies. The perception is that Yahoo! doesn’t want to be owned by Microsoft because they are stuffy and Yahoo! is fun. This may be true, but it’s only the tip of the iceberg. The cultural impacts are far more severe — I estimate that 1 in 10 Yahoos will refuse to work for Microsoft.

Why the intense feelings? Why is the thought of working for Microsoft so awful?

Key reason #1 - Microsoft is anti open-source, Yahoo! utilizes open source technologies extensively. There is a strong divide between the open source community and Microsoft. Microsoft is the antithesis of the open source community, the company all open source developers love to hate. Yahoo! instead embraces the open source community, with almost all of its infrastructure powered by open source tools. Industry experts from these technologies have been gainfully employed at Yahoo! for years, which has propelled the technologies into widespread usage.

• Jeremy Zawadny, a mysql industry guru works for Yahoo!
• Douglas Crockford, a javascript industry guru — the inventor of JSON — works for Yahoo!
• Rasmus Lerdorf, the inventor of PHP, works for Yahoo! This has been a huge boost for PHP as a technology.
• Sara Goleman, a leading expert on PHP extensions, author of Extending and Embedding PHP, works for Yahoo!
• Yahoo! regularly submits back to the open source community
• Yahoo! has contributed to Squid by paying for developers to build features needed by Yahoo!, and then paying them more to have them contributed back to the Squid code base.
• While yahoo uses it’s its own version of Apache, yapache, they have made some important contributions back to the Apache development group.
• Yahoo uses memcached extensively, and has supported memcached hackathons
• Update on Feb 18th. A commenter pointed out: "I’d like to add that Yahoo! also contributes and heavily supports two large open source projects Hadoop and Pig.

Yahoo provides open source technologies with a well resourced environment with top-talent and a high scale proving ground. If Yahoo! is taken over by Microsoft, many of these high profile open source developers will leave. Some of them have already announced this and made it clear. This will be a big blow for open source. Is Microsoft intentionally trying to disband this pro-open source environment?

Key reason #2 - Microsoft is evil, Yahoo! is not. Yahoo! is the most trusted brand on the internet. Why? Because Yahoo! has continually demonstrated that they hold integrity above profits. Microsoft has continually demonstrated that it wants to win, at any cost. Microsoft competes by hurting it’s competition. The United States, European Union, and other government entities agree.

Yahoo! continually gives back to the community, treats its employees well, and is well respected in the business community for fair business practices. Yahoo! holds integrity as one of it’s core principals, and I am proud to say that I work for Yahoo!.

On the contrary, Microsoft is unscrupulous and has continually proven that making money and dominating the world are the top priorities. As an example, look at how they have handled this merger — a complete disregard for Yahoo! and its employees and the impact on the rest of the world. It’s all about winning, building Balmer’s Legacy, and "maximizing shareholder value".

In fairness, Microsoft is less evil then they used to be. After the governments of the world have beat them into playing nice with lawsuits, they are now very careful about anti-trust issues. And now that Bill Gates has more money than he knows how to spend, he has become very philanthropic.

Key reason #3. Microsoft technologies suck. Their server software does not scale, is not stable, and is full of security holes. Large scale websites are not built using Microsoft technologies. I do not know a single developer that would recommend running Microsoft Servers.

On the desktop front, Windows is inferior. I used it for years, and now I’ve switched to Apple Macintosh, and I will never go back. Apple makes far superior desktop machines.

To prove this isn’t a complete Microsoft bash, here are a couple of things Microsoft does well:

1. Gaming machines - Yep, if I was a hard core gamer, I would own a Microsoft Windows machine, because that’s what all the games are written in. Oh wait — that’s not something Microsoft has done well technically, that’s just a market share issue.
2. Hardware - ah yes, really this time, it’s something Microsoft does very very well. One Microsoft product that is great and I will continue to buy - Microsoft Keyboards and Mice. I love Microsoft input devices, they are the best.

While I have tried facetiously to give Microsoft the benefit of the doubt, we all know that the reason why Microsoft has its current market position is because of superior business management, not because of better products.

I have a sincere appreciation for Bill Gates’ ability to win — he has quite a track record and his company has been extremely successful. But on every front, there are technically better products available than Microsoft.

I love Yahoo!, and I am proud to be a Yahoo! I will not work for Microsoft. I’d be embarassed to admit that I worked for Microsoft, and having it on my resume would be detrimental to my career.

If Microsoft is successful in its hostile takeover of Yahoo!, it will be a sad day for Yahoo!, a sad day for open source, and a sad day for Yahoo! employees, including this one.

Update on March 28th: I’ve decided to leave Yahoo! because of the impending Microsoft takeover.

What’s Steve Ballmer really up to? 

I kept thinking to myself, Steve can’t seriously be considering this. He can’t possibly be ignoring all of the issues of a combined company:

1. Culture shock — A lot of Yahoo!’s, self included, are Linux people. We will be embarrassed to have Microsoft on our resume, and some will likely leave
2. Integration challenges — I won’t list them all out
3. Anti trust — Given Microsoft’s history, Steve should know that the government will certainly take issue with Yahoo Mail and Hotmail, MSN Messner and Yahoo Instant Messenger, and others.

I’m calling your bluff Steve. We both know you don’t really want to buy Yahoo!. Why the offer then? Let’s speculate. Sometimes in business, you ask for much more than you really want. Then, when that doesn’t happen, you still win by conceding on something smaller. So he comes in with a threat to buy/takeover, and will settle for something less. What is the "something less" that he could  be after? I haven’t figured that part out yet, but here are some ideas:

1. A partnership to team up against Google. Not a takeover, but a tangible deal that aligns the two companies together as a team.
2. A meaty advertising deal
3. Better product interoperability. Have services such as Hotmail and Yahoo mail work better together

Let’s see what happens, but I don’t think that it’s about a takeover — even Microsoft knows that’s a bad idea.

A Finnish man has grown a new jaw for himself from stem cells. I’m happy to see this exciting forward progress with stem cells, as the implications for humanity are profound. Soon we will be able to grow our own replacement organs instead of getting transplants from others. Once we have a president in the United States that legalizes stem cell research, we should see even more forward progress.

View the complete story on news.yahoo.com