More Microsoft, this time with Yahoo

After Microsoft's latest Vista failings around SP1 (it was supposed to release in 2007), I started thinking a little more about their interest in acquiring Yahoo.

Microsoft has a history of being late to new ideas, usually having to ridicule them a good bit before having a go at it themselves. The internet was one of those things and ad-based revenue with searches was another. Microsoft, rather than attack the market directly, first had to develop or acquire their own tools in order to build the infrastructure necessary to compete.

Basically, we had Google and Yahoo using open-source products, tools and methodologies and Microsoft with their proprietary stack hoping to force their products as de-facto standards. Unfortunately, it's rather difficult to create a de-facto standard with only 9% of the market. One study puts the search engine market share at:

Google - 68.6%, Yahoo - 16.7% and MSN at 8.7%

Even if Microsoft were to acquire Yahoo, their combined market share would still be significantly less than half that of Google's, though it would pretty much triple their current share.

The problem, as I see it, is that Microsoft failed using their own proprietary products and has basically surrendered and said that they can only succeed in this market by acquiring a company that built their infrastructure on open-source technologies. But wait, you say, it's not what it was built with but how it was deployed? No, no, no. The proprietary nature of Microsoft's products prevented them from establishing the very relationships that Google and Yahoo have created.

Google is the most successful and the most open. Google has built a platform upon which others can create their own solutions. http://maps.google.com has become more of a de-facto standard for web-based mapping applications than anything that Microsoft has created because anyone can interface with it and it works on any platform. It is the very attitude of closed vs. open that has enabled Google and Yahoo to be tremendously successful and Microsoft's to continually fail.

My bigger concern, though, isn't that Microsoft might actually acquire Yahoo. Instead, I'm concerned that Microsoft's mere interest in Yahoo portends that the advertising-web-search business model is done with. Microsoft's interest in Yahoo combined with their habitual lateness to new business models may be an indicator that the model is ready to change. Could this be analogous to wanting to acquire Ford's Model-T production line just as the new 1968 Corvettes are about to come out?

Microsoft's continually picking the wrong side combined with their interest in Yahoo has me on the lookout for the next big thing. For one thing, I'm sure, it won't be coming from Microsoft's "innovation" engine.