Everyone is buzzing about the New York Post story that Microsoft is very seriously trying to hook up with Yahoo!. You can read lots of opinion over at TechMeme. The idea is not new – rumors surfaced back in January 2006, and probably existed before that too.
I am excited about the possibility of a combined Microsoft-Yahoo! organization. However, it seems the reason behind such a deal would be to better compete with Google. I don’t think that’s a good enough reason for MSFT and YHOO to tie the knot. Why not? For the same reason this person thinks Google should buy Starbucks (what a stupid idea):
Google was listed as the 17th largest US company in market value, $143 billion at the time of publication in the Forbes 500. Google sprang to that size faster than any company in history. It remains the only company that is not diversified, at that scale or anywhere close to that scale. And when you check on its standing according to revenue (10.6B), it drops from #17 to #241.
Google has one source of revenue: AdSense. What if something happened to AdSense? Nothing is bulletproof. Without AdSense, Google would die. Period. I’m not saying that Microsoft and/or Yahoo! should try to disrupt the AdSense machine. All I am saying is that it’s far easier for Google to make a mistake and pay the price than it is for Microsoft or Yahoo!.
Do it like they do in F1
In Formula 1 racing, one strategy for passing a competitor who is in front of you is to wait, especially if there are a lot of laps left in the race. The reason behind this is simple. If you get too impatient and a take a big risk to go for it, you could very well crash. In general, you’re far better off staying close behind your competitor, putting immense pressure on them. Most of the time, they’ll make a mistake, and you’ll have a chance to capitalize on it with a clean pass. Michael Schumacher was incredibly good at this.
Perhaps Microsoft should take a page out of Schumacher’s playbook? Microsoft can afford to be patient, and the race is far from over.
If Microsoft and Yahoo! want to join up to share technology and build better products, that’s one thing. If it’s just about beating Google, there’s better ways of doing it.
In a way it’s pretty incredible that “Google” has become synonymous with search. It really should make you think of advertising, and perhaps in 25 years, it will. Today Google ventured further down that rabbit hole, acquiring one of the web’s oldest ad companies (via Scoble):
Google reached an agreement today to acquire DoubleClick, the online advertising company, from two private equity firms for $3.1 billion in cash, the companies announced, an amount that was almost double the $1.65 billion in stock that Google paid for YouTube late last year.
Two days in a row now, I’ve seen news break on Twitter. Last night it was the earthquake in Mexico City, and today this acquisition. This is pretty significant, don’t you think?
Anyway, I don’t think Google buying DoubleClick is earth-shattering news. It’s not much of a stretch if you consider Google to be an advertising company, as I do. What’s more interesting is that Microsoft was apparently trying to purchase DoubleClick too. Why? I can only imagine it was an attempt to harm Google.
A few hours ago I was reading some of the stuff on TechMeme, when I came across this article about Google. I thought Dickson might find it interesting, so I fired it off to him in an IM. He replied a few moments later with this quote from the article:
Google wants companies that can build revenue streams from their users, instead of buying firms with a lot of users that don’t bring in much in sales, Ullah said.
“We don’t do traffic for traffic’s sake,” he said. “It has to be highly monetizable.”
And then followed that up with this message:
Haha so true! Ullah, who is Google’s director of corporate development, basically just described the very company they purchased last year for $1.65 billion. Which begs the question…what kind of companies do they really want?
There isn’t much news on this story yet, except for the official press release from Wizzard Software. Today the company announced that it has agreed to acquire Libsyn, currently the world’s largest podcasting network. From Podcasting News:
According to the companies, the acquisition combines the world’s largest and fastest growing podcast network with Wizzard’s expertise in speech technology integration, creating a powerful new service for podcasters worldwide.
Wizzard has been pretty busy lately, snapping up Switchpod back on September 21st and Blast Podcast less than a week later.
So far, there is no word of this deal on the Libsyn blogs or forums. I’m interested to hear their comments, because I think they understood they had to do something. Wizzard gets the top hosting service, and Libsyn gets some financial support to improve their service (and more importantly, quality of service), so it’s a good deal for both I think.
Libsyn CEO Dave Chekan seems excited in the press release at least:
“We’ve had several investment offers in the past and we chose Wizzard due to its expertise in speech technology, its passion for podcasting and its desire to make money for our independent content creators.”
Terms of the deal have not yet been disclosed.
Did Dell buy Alienware or not? Word spread around the web yesterday that the deal was already done, but Dell has said otherwise:
Dell has moved to quash rumors that suggested the company has acquired rival PC vendor Alienware. Speculation about a possible buyout has been rife since Rahul Sood, CEO of original equipment manufacturer Voodoo PC, posted his thoughts on such a move on his blog two weeks ago.
Questioning the accuracy of the information, Paul McKeon, Dell Australia and New Zealand spokesman, said the original source–Voodoo PC–is unreliable since the company is an Alienware competitor.
I would be somewhat surprised if Dell did buy Alienware, simply because Dell is not known for making acquisitions. On the other hand, they haven’t denied it. All McKeon did is suggest reasons why it might not have happened.
Read: CNET News.com
I didn’t see this one coming, but it seems Google has purchased Writely, a web-based word processing app. I guess the deal isn’t that surprising given that there has always been speculation Google would build an online competitor to Microsoft Office.
“We haven’t yet figured out all the details,” Writely said on its site. “Coming to Google will eventually give us a leg up on getting things done that we just haven’t been able to with our tiny team.”
A Google representative confirmed the deal in an e-mail. “We acquired Writely for the innovative technology and talented team,” Google said in a statement. “We’re thrilled to have them here.” The purchase price was not disclosed.
I think Google probably purchased them more for the team than the technology. Personally, I don’t think using a word processor online would be a great experience, but I suppose if they can make it work there’ll be a market. Writely has received lots of positive attention thus far, so that’s a bonus for Google.
Read: CNET News.com
Yahoo keeps going further and further down the acquisition path lately – or at least generating rumors that they are. The newest rumor is that they are set to purchase Digg.com for nearly $30 million. Since the rumor first appeared there have been a number of updates that dispute such an acquisition, but it’s interesting to consider nonetheless. From Kevin Burton’s Feed Blog:
Update 2: The Digg blog officially denies the acquisition. Jeremy was smart enough to have “no comment“… Next time there’s a Digg acquisition rumor you’ll know you’re on to something 🙂
I wouldn’t be surprised if it turns out to be true. Digg would be an excellent addition to the growing stable of apps under the Yahoo umbrella, including del.icio.us and Flickr among others. The other factor to consider in this rumor, which Kevin does a good job of pointing out, is that Digg has insane amounts of traffic, and is going to need either more investment or a suitor with lots of resources to keep pace.
Read: Kevin Burton
Last week I mentioned that Disney was in talks to buy Pixar, and today they announced that the deal is done. Disney is paying $7.4 billion in stock for the company, and Steve Jobs will get a seat on the board:
As part of the deal, which is expected to be completed this summer, two Pixar veterans will head Disney’s animation efforts. Ed Catmull, who had served as Pixar’s president, was named president of the combined Pixar and Disney Animation Studios. John Lasseter, the Pixar executive vice president who is widely regarded as the studio’s creative leader, was named chief creative officer. Pixar will remain in its San Francisco Bay Area headquarters.
Additionally, Steve Jobs is now the largest individual shareholder of Disney. I think it’s a great move for Disney, as long as they execute properly – and by that I mean don’t screw things up.
What has been most successful for the two companies? Pixar made the movies, Disney handled the distribution. I don’t see any reason that should drastically change, so I hope the combined company still leaves the bulk of the creative stuff to Pixar.
Read: CNET News.com
I was a little surprised to run across this article at Reuters this afternoon. Apparently Disney is in “serious talks” to buy Pixar Animation Studios, according to a report in the Wall Stree Journal:
The newspaper report said terms under discussion would have Disney pay a small premium to Pixar’s current stock market value of $6.7 billion. The deal would be a stock transaction and make Pixar Chief Executive Officer Steve Jobs the biggest individual shareholder in Disney, the newspaper reported.
The talks are at a sensitive stage and other options are possible, including an agreement for Disney to distribute Pixar movies, the report said, citing people familiar with the situation.
Given that Jobs has been quite vocal about his dislike for Disney’s deal making in the past (though I am sure he wouldn’t mind being the largest shareholder), and considering the fact that Disney has already invested a lot of money in their own digital animation studio, the rumor is a bit surprising to me. I would be less surprised if the two worked out a new distribution deal for Pixar movies, all of which have been tremendously successful.
Of course, depsite all of that, the move would be great for Disney – a way to keep them relevant. Definitely another rumor to watch!
According to Michael Arrington, the popular video sharing site YouTube has signed an agreement to be acquired. An update on the post mentions that the rumor is highly speculative, but interesting nonetheless:
Whoever the buyer may be, it’s not News Corp. They have confirmed directly to me it has not acquired YouTube.
YouTube raised $3.5 million in venture capital just three months ago from Sequoia. It was founded in February 2005.
I remember early last year when I first discovered YouTube – there was almost nothing on the site! My how things have changed. YouTube has been quite popular in the blogosphere lately, as news has spread that their traffic is pretty amazing and by some measures has overtaken Flickr. Speaking of Flickr, my guess for the potential suitor is Yahoo – they’ve been on a Web 2.0 buying spree lately, so I wouldn’t be surprised at all if they picked up YouTube as well.
I’ll be keeping an eye on this rumor for sure!