Microsoft should forget about the Yahoo deal and concentrate on owning the cloud.
As big as Microsoft is, the company should stick to its core competence and focus on where it will dominate and succeed. What is this core competence for Microsoft? Is it search? Not really. Is it advertising? Not really. Is it developing products that make people more productive? Absolutely.
Microsoft’s global opportunity is to allow people to be as productive on the go as they are when sitting in front of a pc. Essentially lead the way in freeing me from the pc. Bringing Ms Word, Excel and Powerpoint up to the cloud are the basics. Advancing the concept of personal productivity is the huge opportunity I see. Give each of us the equivalent of having our own executive assistant who can support us, execute tasks and anticipate needs. Providing the backbone for this advance in personal productivity is a logical extension to put Microsoft’s core competence to work. The best acquisition I think they made in this direction was acquiring the voice guys over at TellMe. Voice is critical when it comes to mobile computing and this is an area that Microsoft can lead/dominate. In the race for on-line productivity apps, no other company like Google APPs, Zoho or others should be leading Microsoft in this area. The emerging nations alone who have access to the cloud, but not necessarily a pc are a huge opportunity for Redmond. Right now, Redmond still has a war chest that can be utilized to secure this position and getting distracted with the Yahoo deal both in financial resources and attention would only give other competitors more ground to advance.
Hank Williams, guest writer over on Allen's CenterNetworks, gets it - he penned a great post on how to use the cloud for managing the rights to music. This is a great idea and one that Microsoft could help power from an OS "Cloud" perspective.
Let's talk about owning the Operating System of the cloud. One of the biggest threats to Microsoft that I see happening right now is the land grab Steve Jobs & Co. are taking with the lower priced IPhone. Yes it’s a phone, but it’s really the basis for an operating system that can make people more productive by connecting to the cloud. Case in point, why am I getting the IPhone? There are 2 main reasons,
1.) So I can carry my laptop less
2.) Have reasonable computing power and a decent display on the go.
Consider this scenario; I have my IPhone, and I also have a 12’ inch
monitor and keyboard that can be connected to my Iphone, but that can also be rolled up and put in my pocket when I’m
done. This does exist. Where does Microsoft fit in here? They don’t. If they own Yahoo, maybe they might get me to see some content, but when
this day comes, I certainly won’t be clicking on any of the interruptive
display ads that Yahoo wants to sell for 45B dollars on today’s market. So
the Yahoo deal looks to me like a distraction. The reach that
Microsoft would gain by aquiring Yahoo versus the distraction it would
be on the company does not seem attractive for net long term value for
the company - or rather distraction > reach where reach = yahoo's
UU.
So….
Let Google lead in search, but not “cloud” based productivity applications.
Let someone else buy Yahoo and their display advertising business.
Allow me to be as productive as I am now with my pc, when I am on the go and have access to the cloud.
