Some deals can be tough!!



Microsoft and Yahoo! No deal
May 8th 2008 | SAN FRANCISCO
From The Economist print edition

Microsoft walks away from Yahoo!, and both companies lose


RATHER as John McCain cannot be displeased to have seen Hillary Clinton and Barack Obama fighting it out, Google has for the past three months enjoyed watching its only two serious rivals, Yahoo! and Microsoft, tear each other to pieces. Yahoo!, once an internet pioneer, has fallen far behind Google in web search and related advertising. Microsoft still dominates desktop computing but lags behind Google as software moves online. So Steve Ballmer, Microsoft's boss, dared ask Yahoo!: what would be wrong with making, if not exactly a dream team, at least a joint effort out of it?

But on May 3rd, after a frustrating marathon of meetings, Mr Ballmer walked away. He had raised his offer for Yahoo! from an initial $44.6 billion on January 31st to about $47.5 billion, some 70% more than Yahoo!'s value at the time of the opening bid. Jerry Yang, Yahoo!'s co-founder and boss, wanted at least $5 billion more. Mr Ballmer wrote him a bitter letter saying that “you and your stockholders have left significant value on the table.” Wall Street's verdict, on May 5th, was to cut Yahoo!'s value to $34 billion.

That the sell-off was not even worse primarily reflects the possibility that a deal may yet happen. Another software company, Oracle, recently dropped a bid for a smaller rival, BEA Systems, after its board rejected the offer, but eventually had its way after BEA's angry shareholders forced their board back into negotiations and a sale. Mr Ballmer's farewell letter to Yahoo!, by recapitulating the negotiations in all their embarrassing detail, provides just the sort of fodder for Yahoo!'s investors to order Mr Yang to resume talks.

Mr Ballmer took particular pains to criticise Yahoo!'s readiness to “make Yahoo! undesirable as an acquisition for Microsoft.” By this he means Mr Yang's apparent plan to outsource Yahoo!'s search-advertising technology to, of all people, Google. In a purely mathematical sense, this could indeed make Yahoo! somewhat more valuable. Google is better than Yahoo! or Microsoft at placing relevant ads next to search results and collects more in revenue for each resulting mouse click.

Yet it is a bizarre tactic. The history of Yahoo! during this decade is of trying, failing, and trying again to catch up with Google in search advertising. Its first big failure was not to bid high enough to buy Google outright. Its next attempt, in 2003, was to buy Overture, the company that pioneered search advertising, but by then Google was pulling ahead. An outsourcing deal with Google was considered and rejected. For the past two years Yahoo! has invested oodles in a project called Panama that was meant, again, to catch Google.

Presumably Yahoo! has been exerting itself so because it believes that the advertising technology is, along with search, the source of competitive advantage in the internet era. That is certainly what Microsoft believes, which is why it bought aQuantive, an online-advertising specialist, and built its own search-ads platform, called adCenter. What Yahoo! and Microsoft lack is volume—in the number of both searches and advertisers bidding to place ads. Teaming up would help to address that problem; but a capitulation by Yahoo! to Google would merely invite antitrust regulators to look at Google's dominance.

Mr Yang could merge Yahoo! with AOL, the web portal of Time Warner, but AOL already outsources its search ads to Google and would be no help at all in catching the leader. Asserting, as Mr Yang does, that Yahoo! all by itself could become “the starting point” on the internet, and its advertising powerhouse, rings hollow.

Things look just as bleak for Mr Ballmer. He has invested billions trying to make Microsoft an internet and advertising superpower. But it seems not to matter. According to Danny Sullivan, a web-search analyst, Microsoft “literally has no brand” when it comes to its online services—nobody has ever been advised “to Live” or “to MSN” a recipe or a cute classmate. The only one having any fun continues to be Google.

The Star Global Malaysian Forum - Posted: 27 June 2005 at 2:31pm

Someone has asked me an interesting question that I would like to share with all of you as 'mind probe' to trigger our 'art of thinking capability'.

"I am an Accounting student who has passed with flying colours but still uncertain of what to do. I was called for an interview in a construction industry but I am scared that I might not 'make it' to the next level. Someone said to me that I must know the the difference between academic and competency and how to blend them together when I work, Please help"

It was a difficult question but I have answered to it anyway. In principle :

Academic - is a continual learning process - ending up with Certificate, Diploma, Degree and so on. (Authority - Ministry of Education/Ministry of Higher Learning)

Competency - is a staggard learning process - you will have to undergo one level to another. It's also a process 'having experience' before 'experience' and I called it 'learning to work'. (Authority - Ministry of Human Resources)

Both the above require 'accreditation' from the relevant statutory bodies typically on the Modules, Facilitators/Lecturers and Premise where both nature of courses are provided.

Both academic and competency are two core prequisites for fresh graduates but require a little bit of what I call 'customization to the needs of the industry that you are about to be in'.

In one of my lectures in one of the Malaysian local institution of higher learning - on Knowledge Management (Theme : Knowledge Worker), I have said that an Accounting student may not necessarily end up in an Accounting firm. He may also end up in a Construction Industry. Thus, this is where competency comes in where he has to gain some knowledge in advance about construction industry in order to apply his academic-based accounting knowledge.

After graduation, he may have to spend some money (I call it investment) to attend competency-based courses from CIDB, YSP, NIOSH, NPC etc. etc. Not to the level of becoming a Construction Supervisor or Project Manager but to understand the construction industry itself as he has no experience and don't know 'jack' about the construction industry.

He can also mingle round with some of the 'senior/matured 'technical' students' to gain a little bit of data before ascertaining the accounting knowledge that he may have to know before attending an interview with a Contractor (e.g. the COQ - Cost of Quality as a result of defect/repairing cost analysis and how these data contribute to future effective budgetting - project management or How Procurement (of Raw Materials) and a Quantity Surveyor (Bill of Quantities) interface with his accounting capability)

Apart from the abovementioned, I also ask him to refresh his studies on English Language (topics such as report writing and communication) and ICT - (IT application that may apply to him during his work - e.g. a little bit of knowledge of Intranet/Data Mining, ERP/MRP, CRM and how he can contribute his 'tacit data' towards these 'databases' (the main source) in order to have the output for 'explicit knowledge' (after it has been properly 'tapped' by means of QCC tools aided by computer-based analysis)

That's simply IT! Mind you, I didn't get these methods the easy way but I got it from 'hands-on experience', 'learning by heart' and 'continual improvement of my current knowledge and skills'. But for the fresh graduates, think of what I've said...it may prove you useful..one day!

I chuckled when this guy replied to me :

"Is it that difficult??"

Extracted from http://www.brint.com (Knowledge Management Portal)

Internet Marketing Conquering The Airwaves?

With society becoming more and more "connected" to the internet and the increasing bombardment of internet advertising, does anyone think that one day internet marketing/advertising will make commercial TV advertising obsolete? Is it already happening?

Benjiq - Australia

Nik Zafri replies :

A good question indeed! Well, you can say 'YES' and you can say 'NO'.

Let's start with 'NO' first.

a) Is internet advertising/marketing effective enough today even though the internet has been introduced for many-many years? What I've seen today are negative responses mostly - e.g. irritating pop-ups ads, net A & P not adhering to laws, people are not getting the quality they have bargained for etc. etc.

b) Look at the post-offices/postal services/couriers, they are still working are they not? despite there are e-mails and faxes?

c) Look at the newspapers, tabloids etc., they are still in the market - are they not? despite there are online-newspaper and tabloids.

d) People still say 'good morning' and still 'shake hands' with another colleague despite there's intranet with mail and SMS (on both computer and mobile phone)

e) Foreign Direct Investment are still coming (by proper visit) despite the K-Economy and globalization age of ICT, smart partnerships are still happening, the stock market still require people to help them out etc. etc.

Based ONLY on this 5 factors, the answer will definitely be 'NO'! It would be a 'Miracle' if people can get out of this era and go ONLINE on everything!

We still need 'hard copies' and TV advertising. Although, what you said has actually been happening and related to what I termed as a kind of 'digital-divide', but the effect is still not that bad.

Let's now go to 'YES'

a) If people started to re-realize the core 'humanity-based' objective of why ICT was introduced - be it internet marketing or for whatsoever thing - where the objective states - 'to protect the environment, trees esp. so that less trees are being cut to make papers', probably, this will one day replace 'hard copies'. Even that is so, TV is also; in a manner of speaking; helping out the preserving natural environment as well (in this context)

b) If everyone learn how to follow rules and know how to be patient in helping another online business and follow the flow of e.g. MLM. Then one day, what you say will happen.

But what I see today are attitudes that goes something like these :

"Mr. X saw an online advertising about products and services of 'Y' Company. He thought that, if 'Y' can do it, why not me? So he gets online, build another website similar to 'Y'."

"Mr. X saw a 'value click banner' on 'Y' company's website. The URL clicked will also state 'Y's ID so that if Mr. X intended to buy something through this 'value click banner', then Y shall be entitled to a certain 'commission'.

But Mr. X again said, why must I click on 'Y's 'banner' when I can create another on my website? Why must I give money to 'Y', when I can get money on my own? So Mr. X approached the company directly using 'Y's URL and applied for another value click banner for his website...."

What I'm trying to say here is : "When there are only 'Sellers' or everybody wanted to become a "businessman", who's going to become the 'Purchasers' or whose going to become your 'customers'?

Today, newbies in business tend to create very unhealthy competition (even in reality) - spoiling other businesses with low price + low quality.

c) If the top people in the government knows how to enforce regulations properly on the online ads , perhaps again, what you say will work. But in today's environment, it is hard to control these online ads despite how many regulations (e.g. intellectual property, BSA and FBI regulations even) etc. etc.

But you can still see people actually 'smart-shopping' on TV, CableTV etc. etc. The people is still confident with the formal advertising as these advertisements are still subject to rules before they can be displayed on TV...making people feel secure.

I heard the internet users are no longer considering internet advertising due to doubtful over some of the contents - unscrupulous people posting 'false bid' on the net and some 'get-rich-quick' scheme through so 'called' projects, money-'investment' (actually laundering), 'black money' , undelivered goods etc. etc.

Again, maybe, we should stick back to the original culture, once you have advertised on the net, you should be able NOT to force people to BUY from the internet although you may have all the measures like digital cert, firewall etc. etc.

But why not ask people to enquire first - give them some space to think ...and try to make appointments with them (not the digital appointment like video-conferencing). See them in reality, get into conversation, let them be 'used' to you first, give them hard copy surveys, only then, you can ask your customers to purchase ONLINE! Give them some 'free gifts'..perhaps they would like to go for your web (then you may consider your online software and web as 'user-friendly' but by 'forcing' people to buy or 'go', it's not 'user friendly' at all although the 'web-functionalities' are easy to cope up with)

I noticed that these methods are working on 'freeware' and 'shareware' concepts, MP3 and other multimedia format downloading (including use of Adobe PDF) etc. etc.

Big companies like Yahoo, suffered first before they reach this level you have seen now...

'E-commerce is NO 'brick and mortar' plus 'overnight business'

Remember this phrase?