Anyone with their ear to the ground heard the news of this offer long before it was officially released. It’s a natural progression in the maturation of the web industry as a separate entity from the internet industry, which is separate yet again from the computer industry.
The much touted web 2.0 “shift” isn’t really a shift, it’s an inevitability of the medium. The web as an extension of reality, an appendage to the real-world and portal we use to access real-world things is on the way out. The ecology and content of the medium, the diversity of services, capabilities and sheer quantity of people connected have made it an equally valid avenue for interaction - intellectual, social and eventually physical.
Yahoo! started out as a mechanism for content integration - it quickly became a traditional content churn and stagnated. Those few innovative products it offered (like Flickr) were purchases not in-house creations. GeoCities etc all had their time and place as the vocabulary and mechanism for meaning of the web matured, evolved and was eventually discarded like the training-wheels they were.
One’s identity and location is the primary mechanism of value. Location exists outside of real-world geography and now about one’s location in social graphs, content systems, transaction networks and the like. Tools that allow you analyze flow and dynamism - rather than static content “stacks” are those that will provide the greatest value and greatest room for innovation in the future.
Microsoft is still the provider to virtually everyone’s interface with the digital world. Even IF there are large collections of users who don’t use any of their products ALL consumer software is an answer to it - unavoidably. Microsoft is the pace car of the software product race.
While it’s obvious that Microsoft stands to position itself as a competitor to Google’s advertising marketshare, I don’t think it’s a battle it can win or should even fight. Microsoft isn’t about marketing, their competencies have centered around large scale integrated platforms for productivity and interrelation. There’s still nobody who does it quite as well on the scale that Microsoft can.
Yahoo! and its properties provides a new column of channels for Microsoft to offer that same coherent, integrated service SYSTEM that it does in its operating system, office suite, web tools even gaming console. It has room for innovation through the cross pollinating of its own software - to a degree simply no other company could even dream of doing.
Off the top of my head, email and contact management is a big area that the merger could address. The cross-cutting integration of email, chat, social networks, personal homepage/blogging and say…my gamertag by having my respective applications share a centralized, open data standard would be Microsoft’s disruptive tech. It’s something Google just couldn’t do. Connecting my social networks with my Windows Media PC to share TV shows with my friends or plan movie get-togethers is another option.
Integrating Flickr with my outlook contact list and Facebook to tag and merge the resources of each is yet another simple mashup.
With Microsoft’s interests in Facebook and the potential acquisition of Yahoo! we could see a great deal multi-media social networking and social graph centric information tools.
The ads, well, they’ll make money - sure, at least for the next couple of years…maybe. New revenue models need to start coming, and fast. Advertising, the way it is used, delivered and sold, is not sustainable.
Much of Yahoo’s product offering is stagnant or obsolete, if it is to successfully leverage the $14 billion dollars in assets it needs to separate the wheat from the chaff.
For god’s sake KILL GEOCITIES.