Yahoo's Openness Asset

What if Yahoo's main value isn't its search engine or its advertising business, but the openness that makes it more Net-native and hacker-friendly than Microsoft? Does Microsoft understand that this same kind of openness plays a large role in Google's success as well?

You don't find any sign of that understaning either in Steve Ballmer's offer to Yahoo, or in mainstream media coverage of the topic.

Google, on the other hand, gets it... to some extent. That's my take-away fromYahoo and the future of the Internet, a post the company put up on its own blog. Here's the gist of it:

The openness of the Internet is what made Google -- and Yahoo! -- possible. A good idea that users find useful spreads quickly. Businesses can be created around the idea. Users benefit from constant innovation. It's what makes the Internet such an exciting place.

So Microsoft's hostile bid for Yahoo! raises troubling questions. This is about more than simply a financial transaction, one company taking over another. It's about preserving the underlying principles of the Internet: openness and innovation.

Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC? While the Internet rewards competitive innovation, Microsoft has frequently sought to establish proprietary monopolies -- and then leverage its dominance into new, adjacent markets.

Could the acquisition of Yahoo! allow Microsoft -- despite its legacy of serious legal and regulatory offenses -- to extend unfair practices from browsers and operating systems to the Internet? In addition, Microsoft plus Yahoo! equals an overwhelming share of instant messaging and web email accounts. And between them, the two companies operate the two most heavily trafficked portals on the Internet. Could a combination of the two take advantage of a PC software monopoly to unfairly limit the ability of consumers to freely access competitors' email, IM, and web-based services? Policymakers around the world need to ask these questions -- and consumers deserve satisfying answers.

That last paragraph, however sincerely felt and expressed, is FUD. The chance of Microsoft trying any of that crap, much less succeeding, is zero. Or, if they try, suicidal. As Joe Nocera says in the New York Times, "the old strategies that once worked so well for Microsoft — strategies that worked when the world still revolved around Windows — have no place in this new world".

On the other hand, the chance of Microsoft trashing Yahoo's open culture, open code, open APIs and support for open communities exceeds zero. But by how much? We don't know yet. We might hope that Microsoft begins to understand that one big reason Google kicks Microsoft ass is Google's highly participatory membership in the world of open code and open standards. We might also hope that Microsoft might understand that the most valuable assets Yahoo has are goods that are totally useful but essentially un-sellable. That includes employees, users, customers and code.

Of course the mainstream ignores that completely.

Also ignored is vulnerability in the entire online advertising business. It's growing like crazy, but it also has all the signs of a bubble — just like it did back when "push" was a big buzzword* back in the late 90s. As Don Marti put it to me on the phone a few minutes ago, "the main role of advertising is to cost money".

For all the degrees to which Google has improved advertising — by making it accountable, and by making it useful as a strategy for countless companies large and small — it is still wasteful. For every click-through there are dozens to millions of "exposures" that are wastes of electricity, server cycles, bandwidth, pixels, rods and cones.

Advertising is also all about supply pushing toward demand. What happens when demand starts pulling supply? On its own terms, and not just those of the supplier, and outside of any supplier's silo? This will happen, and it will obsolete much of advertising as we know it.

No, I'm not saying advertising will go away. It won't. But the bubble will burst. Count on it.

Meanwhile, if it looks like Yahoo will disappear inside Microsoft, or if the only Yahoo assets Microsoft finds worthwhile are search and advertising weapons it can use to battle Google, this deal will go down as one of the biggest blunders in business history.

* Those two links go to pieces I wrote back in 1997 and put up on the Web because I couldn't sell them to any mainstream magazine. They provide a good window on the last bubble, gassing up on bull fumes.

______________________

Doc Searls is Senior Editor of Linux Journal

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Mmmmmm... I smell dirty

Mayio Seo's picture

Mmmmmm... I smell dirty tactics everywhere. In the end, 'freedom' is still held-up by those who have the greens.

MS and Yahoo

krum's picture

I was really hoping they would allow MS to buy them. It would be fun what would happen and revolutionary as well.

Cheers,
Krum fr. kennel cough

I think you are being naive.

Burz's picture

Here is my reply to your last posting.

Microsoft is making record profits, many years after the OSS pundits hailed its imminent doom. Strategies of control and domination work against openness and fairness in large part when the former are not taken seriously. After all, who wants to be ringing the alarm when so many people on the street will compare that with all of the fluffy rainbow-butterfly PR on the surface of MS and regard you as a crackpot?

Have your way. Be the superior libertarian, but prepare to see your dreams whisked away.

The Linux Journal Spam Flag

Anonymous's picture

First of all, the Linux Journal Spam Flag Message should be RED not Green.

Then, there should be some disclosure on the website about the Linux Journal Blog Spam Policy.

If the Linux Journal wants to pick and choose, review, take a internal vote, or send a blog entry to its lawyers before deciding if it wants to post an entry (or not), then there should be some ground rules posted on the website.

If a reader takes the time to read a blog, digest the content, and then feels they want to take more time to put their thoughts into a blog entry, preview them, and then post them, just to be greeted by a BIG GREEN BANNER MESSAGE at the top of the page telling them they are a SPAMMER, mabey the Linux Journal could add a way for readers to cancel their print subscription too.

Spam Filters

Webmistress's picture

Hi,

Our spam filters are far from perfect. Occasionally legitimate comments get flagged as spam, and definite spam sneaks through now and then.

If you could give me some details about the comment you tried to post, I could track it down. The subject and time of the post would be helpful.

Thanks!

update: I think I found it.

Katherine Druckman is webmistress at LinuxJournal.com. You might find her on Twitter or at the Southwest Drupal Summit

Our spam filters are far from perfect.

Anonymous's picture

Time to check it again.

Hint, Zimbra Comment in your SPAM filter...

Anonymous's picture

Microsoft-Yahoo post-deal disposals could include Zimbra

By Louise Bleakley in San Francisco and James Erik Abels in New York

Published: February 11 2008 16:02 | Last updated: February 11 2008 16:02

This article is provided to FT.com readers by mergermarket—a news service focused on providing actionable, origination intelligence to M&A professionals. www.mergermarket.com
--------------------------------------------------------------------------------------------------------

Zimbra could be divested by Microsoft if it succeeds in its unfolding bid to acquire Yahoo, a banker and two analysts in the space told mergermarket.

Mabey this spam discussion should be removed /DON'T POST THIS!

Anonymous's picture

Spam and Spammers are a challenge to all of us.The spammers win when they disrupt the efficient flow of ideas on the net.The Linux Journal has a great wealth of talent in and around it.There needs to be a better tool set to deal with the spam issue to protect the free flow of ideas that are initiated by great minds such as Doc Searls.A big green banner telling you that you are a spam suspect and that your entry will be reviewed (and then it is not reviewed without a prompting post on the blog) doesn't get it.Mabey there needs to be a submit button next to the Suspected Spam Banner with a tool like the ones used on "whois" searches with a series of letters and numbers that must be entered.The topics covered in these blogs are very important to the future of computer freedom. This flow of ideas should not be broken by spam issues.

1. The spam discussion in this blog should be removed or moved to a new blog.

2. The Linux Journal should address and fix this problem.

3. When an "Anonymous" post is made as to the workings of the Linux Journal Blog System through that blog, the discussion (such as this one) should be placed somewhere else on the website or on the blog so as to NOT disrupt the flow of ideas for all of the other readers. How about a window like Google has for better search suggestions "Dissatisfied? Help us improve " ?

Protect the flow of ideas if you want to protect the net.

The Yahoo takeover bid problem could do great damage to Linux progress moving forward.

Please repair this blog so that Doc's thoughts can grow into a solution.

why I keep reading Doc's opinions...

pauly's picture

"wastes of...rods and cones": what a lovely turn of phrase to capture the egregious waste of precious time that is advertising exposure. The dense and prolix nature of Steve Gilmor's ongoing discourse on "attention" would be improved by this kind of phraseology I think...

Why advertising has to be expensive to matter

Don Marti (yes, Don Marti.  Please get OpenID)'s picture

Here's more on advertising and signaling -- why the fact that an ad costs money is the most important signal it can send. Ultimately this is good news for news operations, since the better your content, the more signaling value your advertisers get from buying your ads.

In a "FREE World" or a "SHACKLED World"

Anonymous's picture

Doc, you and Balmer may have a much different view of our world in the future.

"it is still wasteful. For every click-through there are dozens to millions of "exposures" that are wastes of electricity, server cycles, bandwidth, pixels, rods and cones. "

Mabey Evil has another dirty plan to improve advertising efficiency. (to crush the competition)

What if Evils "Shackled World" view is to leverage all the "registered" users of current MS prosucts and services? You have to register their products with a "800" number or a Windows OS. Evil knows who you are.

Mabey all those free Windows OS's going to China isn't about the OS revenue,
it may be about the customer data.

"Microsoft plus Yahoo! equals an overwhelming share of instant messaging and web email accounts. And between them, the two companies operate the two most heavily trafficked portals on the Internet. "

Do you think the Evil plan could be to take the current MS "big brother" data set and enhance it with the Yahoo e-mail and portal data collected on Yahoo Users?

Do you think MS would use SPYWARE on its users to increase advertising efficiency ?

We think about FREEDOM and a "Free World", Evil dreams about CONTROL and a "Shackled World" .

Just look at the depth Microsoft sank to last fall to RIG the OOXML ISO vote.

Evil vs. Stupid

Doc Searls's picture

Here's the problem. Microsoft's evil plays have been declining in value for years. The success of non-evil approaches to markets and partners and to the Net in general is hard to miss. Google and Yahoo are far from perfect in those respects, but they have been far more clueful than Microsoft, which continues to mistake lock-in for embrace. (Though not across the board, fwiw..)

The brilliant woman to whom I am married once uttered a great line about evil conspiracy theories. "The problem with all conspiracy theories is that they presume competence."

At this point I don't know how to read Microsoft as a company. On the one hand they can do brilliant and remarkably open and cooperative work. Such is the case around identity (lately, not back in Passport days). On the other hand, they do the things you list in your comment. They'll hire a Ray Ozzie and a Jon Udell, yet Ballmer rants against Linux and about advertising as if coercivie and abrasive business practices are all he knows.

FWIW, my first reactions to Microsoft's huge investment in Facebook (for a tiny piece of equity) and its $44.6b offer for Yahoo were "that's nuts" in both cases.

Their problem, to put it bluntly, is failure. They're failing at search, at online advertising, at getting people to switch voluntarily to Vista. They're doing well in the enterprise with a lot of appealing offerings and a strange but real acceptance of lock-in by large customers. Exchange alone is a monstrously huge anchor for the company. It may be their most important product. People may hate Vista and other Microsoft products, but they love, and live in, Outlook, Excel, and Powerpoint. We may hate those products on the Open/Free side of the fence, but The Market loves them.

But Outlook, Excel, Word and Powerpoint are old products with long legs. Vista and many of these other new efforts are the weird failings of a company that is losing its way, big time. The Yahoo offer is a desperate move by #3 to buy #2 in a market where #1 has close to a monopoly position.

And worse, that market — advertising — is itself a bubble. I don't blame Microsoft for not noticing that. Few do. But a bubble it is. Some day it will pop. (By the way, I know at least one high-up person at Google who gets that. The same can't be said, I'll guess, about Microsoft.)

Anyway, I dunno. We're thinking out loud here. I could be right, wrong, or both. Same with the rest of us.

Doc Searls is Senior Editor of Linux Journal

MS "Exchange" vs. Yahoo "Zimbra" vs. Google "Apps" in the Cloud.

Anonymous's picture

Doc, MS is using "Advertising as a Smoke Screen". You hit the nail on the head.

"Exchange alone is a monstrously huge anchor for the company. It may be their most important product. "

From Wikipedia, the free encyclopedia

Microsoft Exchange Server is a messaging and collaborative software product developed by Microsoft. It is part of the Microsoft Servers line of server products and is widely used by enterprises using Microsoft infrastructure solutions. Exchange's major features consist of electronic mail, calendaring, contacts and tasks, and support for the mobile and web-based access to information, as well as supporting data storage.

About Zimbra (from zimbra.com)

Zimbra, a Yahoo! company, is the leader in open source, next-generation messaging and collaboration software. We built Zimbra Collaboration Suite (ZCS) with the belief existing email and calendaring solutions are broken- the result is an innovative experience for end-users and system administrators.

From Wikipedia, the free encyclopedia

Google Apps is a service from Google for using custom domain names with several Google products. It features several Web applications with similar functionality to traditional office suites, including: Gmail, Google Calendar, Talk, Page Creator, and Docs.

Remember this? Aug. 17, 2006

Novell had a memorable day Aug. 17 at the LinuxWorld Conference & Expo in San Francisco. Its SUSE Linux Enterprise Desktop (SLED) 10 was a double award winner, being named both "Best of Show" and "Best Desktop Solution," and its AppArmor product earned "Best Security Solution" honors.

What was Microsoft and Ballmer in the process of doing behind the scenes on this day? Planning a strategy to knock the legs out from under Novell.

Everybody needs to keep their eye on the ball.

Microsoft is lost in the "Cloud". Google Apps and Yahoo Zimbra are a HUGE threat to "their most important product".

Microsoft's track record is clear.

This Microsoft Yahoo Offer is not about increasing competition in the Internet Advertising market, it is about crushing competition by knocking the legs out from under Yahoo Zimbra while it still can.

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