What Microsoft wants from Yahoo —
Anyone analyzing or investing in these companies should give this long analysis a good read.
Excerpt:
Actually, Yahoo has gotten into a situation where it would be happy to license Microsoft the patents it wants, but it can not do that. Relenting on patent licensing terms is not an option for Yahoo. Remember Miva? Miva was the niche paid-search operator who almost prevailed in court but even then Yahoo insisted on collecting patent royalties from it. The reason for Yahoo’s obstinance with licensing terms is obvious: it can not give anyone a good patent licensing deal in isolation. Giving someone a good deal will trigger an escape clause in a lucrative patent licensing agreement with a big fish third-party, allowing that patent licensee the better terms as well.
Microsoft is perfectly aware of Yahoo’s constraints.
This actually makes some sense, in a convoluted way.
Microsoft as the corporate raider. Divide Yahoo into discrete pieces and sell off what you don’t want. Keep what you do. What would Microsoft want? Yahoo’s intellectual property and web traffic. The intellectual property to allow unrestricted advertising, and the web traffic to increase ad viewership.
Here is the seminal quote from the article: “The paid search situation for Microsoft has not changed since then. Microsoft is still chafing under Yahoo’s influence and is desperate for unfettered access to the ‘361 patent. It is quite possible that the size of the royalties Microsoft is paying to Yahoo are forcing Microsoft to neglect its paid search operations in order to minimize payments to Yahoo, and to minimize the size of an eventual settlement with Yahoo.”
Add this to the Yahoo-Google advertising cooperation pact (which Microsoft would own), then couple this with Microsoft’s “cross us and we’ll crush you” attitude, and it becomes clear that Microsoft’s bid for on-line advertising may actually have some teeth to it.
It becomes entirely conceivable that virtually ALL internet placed ads in the US would go through Microsoft’s coffers.
Machiavelli would be very, very proud.
All this drama is about Microsoft fighting to possess a single, proven method to stuff unwanted advertisements into all of our brains via our poor, burning eyeballs.
I’m quite sure if they re-directed just a tiny fraction of the money they’re spending on this folly to creative people, the creative people would already have come up with dozens of fresh, new ways to stuff unwanted advertisements into all of our brains via our poor, burning eyeballs.
Microsoft sucks
#3 Todd man – Yahoo too.
M$ sucks but they can’t be faulted for a pretty good strategy to injure a competing company. It’s what M$ does best (since we know the OS isn’t anymore). This sort of looks like a tug-of-war between Google and M$ with Yahoo as the rope. If M$ gets Yahoo’s patents who knows what evil things they will do with them, especially to Google.
Thanks for the article – very interesting.
The author has a good point, but if it is his contention that the ‘361 patent is the most valuable patent, he has the wrong patent, as there is a more valuable patent that YHOO has.