Microsoft’s long courtship of Yahoo ends with a sad whimper — from Yahoo. Redmond gets a ten-year exclusive license to Sunnyvale’s search technology. Bing becomes the official search engine powering Yahoo. Yahoo is reduced to nothing but a salesforce for Bing’s search ad space.
Yahoo gave up on search years ago. Microsoft CEO Steve Ballmer, on the other hand, will stop at nothing to satisfy his crazed vendetta against Google CEO Eric Schmidt. How crazy is Ballmer’s vendetta, you ask? He’s willing to give Yahoo 88% of all search ad revenue for the first five years of the deal.
Sure, Yahoo basically sold an old clunker for way more than it’s worth, but consider what Yahoo’s got left. With Yahoo handing its entire search business Microsoft, the former Internet titan risks becoming a glorified content portal a la AOL. Even AOL is moving away from that strategy.
If this deal sounds familiar, it’s almost exactly what happened between Google and AOL years ago. How ominous, then, that Google just sold all its AOL shares — at 28 cents on the dollar. You have to wonder if Yahoo’s value will be similarly eviscerated down the line. As John C. Dvorak points out, whenever Microsoft loses focus on its software business and dabbles in some other initiative, that initiative eventually gets discarded like a broken old toy. Yahoo could become Ballmer’s next broken toy.
This is not about “choice, value, innovation“, as Microsoft’s spinmasters would have you believe. This is a dejected Yahoo selling its broken body to Microsoft, for the latter to brutally ravish in a feeble attempt to shock Google. Unless Yahoo can somehow become more than a less-focused AOL-clone, Jerry Yang’s baby becomes nothing more than Ballmer’s bitch. What a depressing end to such a tortured drama.