The recent takeover bid by Microsoft of the former internet darling Yahoo! was long thought to be a sound business decision. The joining of their forces was seen as a marriage of aging man that is incredibly rich (Microsoft) and a divorcee (Yahoo!) that still looks pretty good and has a few tricks left to turn. (A bad pun.)
As Andrew Ross Sorkin at the NYT reflects:
The message that jolted Mr. Yang also jolted the technology industry. Yahoo,
founded by two Stanford graduate students, Mr. Yang and David Filo, was once the
leader of the dot-com world. But it has been dethroned in recent years by
Google, itself founded by two Stanford graduate students.
This battle will barely begin before Bill Gates steps down as the chairman of Microsoft, leaving it in the capable, if only marginally visible hands of Steven A. Ballmer. As Google and Microsoft enter their virtual cage match of internet death in 2008-9, one suspects they will be fighting a War of the Virtual Roses.
Wikipedia quotes on the War of the Roses:
The antagonism between the two houses started with the overthrow of King Richard II by his cousin, Henry Bolingbroke, Duke of Lancaster, in 1399. As an issue of Edward III's third son John of Gaunt, Bolingbroke had a very poor claim to the throne. According to precedent, the crown should have passed to the male descendants of Lionel of Antwerp, Duke of Clarence, Edward III's second son, and in fact, Richard II had named Lionel's grandson, Roger Mortimer, 4th Earl of March as heir presumptive.
However, Bolingbroke was crowned as Henry IV. He was tolerated as king since Richard II's government had been highly unpopular. Nevertheless, within a few years of taking the throne, Henry found himself facing several rebellions in Wales, Cheshire and Northumberland, which used the Mortimer claim to the throne both as pretext and rallying point. All these revolts were suppressed.
The wars were also fought largely by the landed aristocracy and armies of feudal retainers. Support for each house largely depended upon dynastic factors, such as marriages within the nobility, feudal titles, and tenures. It is sometimes difficult to follow the shifts of power and allegiance because nobles acquired or lost titles through marriage, confiscation or attainture.
This virtual war started long ago between Google and Microsoft as each has gobbled up companies, made threats, lay claim to the title, "Internet King" and put to work "coding
foot soldiers" to destroy each other's empire.
From the Sydney Morning Herald, from 2005:
After learning Lucovsky was leaving to take a job at Google, Ballmer picked up his chair and hurled it across his office, according to the declaration.
Ballmer then pejoratively berated Google CEO Eric Schmidt, Lucovsky recalled."I'm going to f---ing bury that guy, I have done it before, and I will do it again," the declaration quotes Ballmer. "I'm going to f---ing kill Google."
Before joining Google, Schmidt was a top executive at Sun Microsystems Inc. and Novell Inc., a pair of tech companies that Microsoft has previously battled.
At this point, Microsoft was hoping to legally stop Google's expansion after they had hired away ex-Gates guy Kai Fu-Lee to head up expansion into the megamarket of China. (Yahoo! also made news in 2007 in assisting the Chinese government in a crackdown on free speech.)
As a result, Microsoft is buying Yahoo! to thwart Google in the mother-of-all emerging markets, China. And to improve their share of an all ready non-competitive market as this quote reflects from the NYT's Andrew Ross Sorkin:
The combination of Yahoo and Microsoft would create a more powerful counterweight to Google. Yahoo’s audience, already the largest on the Internet,
would be bolstered by the tens of millions of users of Microsoft’s services,
creating a much larger online display advertising business. In Internet search,
the market share of the two companies would rise to 31 percent of the
American market, according to comScore. That would still be far below Google’s 58 percent share, but would help the companies attract more advertisers and higher prices for ads.
89 percent in two companies!!!
Hardly seems fair.
But War never is.