Yahoo, the New Hi-Tech Soap Opera

Microsoft: "Yahoo, you just don't understand. I really need you."
Yahoo: "Oh, no, you really don't need me. I'm not really worth it! And anyway, it's too late! I've already promised 3% of myself to Google, so how could you possibly want me now?"

There's quite an interesting discussion going on at Tech Crunch today about the finagling of Yahoo, Google, and Microsoft. As one commenter said, "These days I have stopped watching movies for entertainment. YHOO vs MSFT and Hillary vs Obama are more entertaining..."

I have to agree that this is one of those very strange soap operas in an age of acquisitions, mergers and where everyone is just trying to catch up with the competition. It's not absolutely smart for Yahoo to hide behind Google, and I would agree that this is a weird way to go. If it's to get their name in the news more often, then they're doing a good job of it, but maybe they need to take a lesson from Google.

Google, interestingly enough, hasn't been affected so much by any of this hullaballoo. The stealthy giant stands on the sidelines, not saying much, while still having the ability to make deals with Yahoo as if in a back alley way.

But then again...maybe, just maybe...Yahoo's founders are ready for an exit strategy?

Read the TechCrunch debate

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Yahoo Decides to Regroup

I jumped on to the web today to find out the most recent verdict on the Microhoo! investment. Yahoo has received a lot of pressure from stockholders and consumers who have complained that Yahoo would be a sell out if it sells to Microsoft.

I mentioned previously that Yahoo! and Microsoft would have had trouble merging, even though Microsoft has been adamant that a Yahoo! acquisition would strengthen their presence on the web. And of course, many questions arise about what happens with Yahoo mail and Hotmail if they were combined.

In any case, Yahoo finally concluded to Microsoft that they would have to step out of the offer because Microsoft had largely undervalued the company with its February 1st bid of $44.6 billion.

More on this in Infoworld's article, "Cheapskate."

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The Start Up 101 Series - Zonbu

*I was going to post about revenue models today but I met with one of the co-founders of Zonbu today and could not resist posting this instead.*

Business is often an elusive practice. For some odd reason, some businesses succeed and others fail simply by trial and error. So is the term entrepreneurship, and so I should point out here that for all the academic theory and research surrounding this idea, it is those who have been able to embody the spirit of entrepreneurship who have been truly successful.

As for Grégoire Gentil, when I met him in his office on El Camino Real, it became evident that whatever the traits are for an entrepreneur, he is inexplicably an individual that embodies those traits not only in spirit but in action.

Gentil launched three businesses since 1996. In 2006, Gentil and his colleague Alain Rossman created Zonbu.

So what is Zonbu? The technology has the look and feel of the traditional desktop (for $99) or laptop (for $279) but isn't quite the desktop or laptop that we know. Aimed at casual laptop users, Zonbu provides an open source software where the computer is more of a portal to the data stored on a server somewhere rather than a computer.

In addition to that, most of the company's revenue comes from a subscription based service rather than the device itself--a type of HP printer model where the printer itself is a cheap base price, but you pay more for the print cartridges later.

Gentil, as a technology geek and avid trendwatcher, has been able to create what he calls a "disruptive technology"--the very thing that will keep away corporate giants like Dell and Microsoft from his market niche.

As a disruptive technology, it tends to just elusive enough for the corporate giants not to move into this space, and Gentil attributes this to defining a very clear and specific niche where larger players may not be able to support.

So how has Gentil been so successful at creating 4 start-ups to date? Gentil had no direct answer, except to say, "You have to be stubborn enough to believe in yourself and what you are doing, because others may not believe in what you are doing."

He has also been very good at simply identifying solid trends and opportunities. Zonbu is the intersection between cloud computing, sound hardware design and open source. It's an ambitious idea for sure, as he has also been able to integrate poignant environmental issues into the benefits of the technology.

For those of us who want to start a business, Gentil advises, "You have to start early." The older you are the less opportunity there is to succeed. My perception of this is that perhaps the more responsibilities and pressures there are to succeed. This is centrally against the principle that entrepreneurs must be able to pursue risk without boundaries because entrepreneurs risk failure just as much as success.

However it seems that Gentil's skill at identifying opportunities, "stubborn" nature and technology knowledge have contributed most to Gentil's success thus far.

In addition to that, it also helps if you "hire people who are smarter than you."

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Microsoft loses sight of company goals

I read Dean Takahashi's column today about how Apple has been very successful at innovating their products recently and taken away some of Microsoft's market share.

Recently I wrote about Microsoft's offer to purchase Yahoo and I think Takahashi is right. Microsoft has to solidify their core business before they tackle the internet space. Yahoo as well seems to be losing sight of their core business by engaging in the Microsoft deal although more recent news suggests that stockholders are holding Yahoo back from making any deals, not to mention that such a merger would be challenging with two very different cultures.

Microsoft may have been largely successful due to the large market share in PC products versus Apple in early years, but if the price point is right, consumers may just switch to Apple, and especially since it seems to have more intuitive and better software than Microsoft's products.

*Updated: Photo to represent not the iPhone but the core business of computers, laptops and OS software. Courtesy of 65 Bit Computers.com

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Microsoft-Yahoo

The world is abuzz today as Microsoft has proposed to buy Yahoo! AND Yahoo! is actually considering the offer. There are often mixed feelings for users of services acquisitions happen like this. Microsoft isn't great when it comes to innovation and has been better at simply buying companies who innovate well.

I'm surprised because in some ways, I felt like I should have seen this coming. Microsoft started to go after the big players when they made a bid on Facebook and it's starting to be come clearer now that they want a bigger share of the online space, while they have been leaders in desktop software for a long time.

Economically speaking, mergers are never good for consumers. First of all, Yahoo's problem recently has been in scalability and Microsoft can't solve that problem. There is going to be a lot of organizational change if and when the merger takes place. Second, Microsoft's goals and Yahoo's don't seem well aligned. Microsoft is a stodgy old, uninnovative company and Yahoo needs to figure out some way to act quicker, stay nimble against their number 1 competitor Google.

Maybe it's because I am a user of Yahoo products, but this just sounds like a bad idea.

Other articles fielded on this story:

TechCrunch-"Wow"

The Guardian UK - "What would a Microsoft-Yahoo deal mean for web users?"

InformationWeek - "Microsoft Proposes To Buy Yahoo For $31 Share, In $44.6-Billion Deal"

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