Microsoft Buys Yahoo Search biz – Why is this a good idea?

I dont get it, maybe Im not the smartest guy, but some questions arise:

1) how will Microsoft retain the brand image of Yahoo search – I mean it is almost a sure thing that no matter what they buy will devolve into another MS Live-Blah misbranded product? no?

2) what will Yahoo do with the missing search revenue? Just replace it with Google. I thought that Yahoo has sunk almost a billion into its search platform R&D, – isnt this an admission that they have failed? If so, why would MS want it?

I have a good friend who was invited to “jury” for Yahoo’s senior search team. That is the only way he could describe it – A Ph D. style juried dissertation taking place over 4 days. This man is a senior computational scientist with credentials in the pharma, life sciences, and trading tech market, and he is one sharp blade; I worked with him at FT R&D. He did not, ultimately get the job at Yahoo, but he had this to say (and I will wrap up why I think this is relevant to MS-Yahoo): read post¬† jump for his impressions

Me: “So Doc, what did you think of the people and technology at Yahoo’s vaunted search team? Nine days is a long grilling, heh!”

Doc M: “They had prepared several problems and asked me to deliver theoretical approaches, and then I gave two days of my own computational research dissertations on applied search systems and computational algorithms and the resources to provision”.

Me: “Pretty Impressive bunch of folks, really cutting edge? Big resources?”

Doc M: “Big ego’s, bigger personalities getting in the way of the applied science, locked into code a year or more behind the state of the art – it seems like a dysfunctional organization”

Me: “Doc, are you sour grapes ’cause you don’t think they’re gonna hire due to your endearing personality” (he was brilliant but an opinionated SOB – just the guy I want for a senior scientist).”

Doc: “the ego’s on that team are jumping all over the science – they couldn’t let each other make a point – half of them came up to me after my last presentation and bad mouthed the other guys, made confessional statements that put me in the role of a ‘father confessor’, and asked if I knew of other gigs, would I drop an email”.

Me: “Doc, you ain’t no priest – you are half Jewish!”

So, what’s my point?

  • Yahoo has a functional but weak search technology fraught with internal limitations and a team that is barely handing together. in other words, it ain’t the crown jewel of search, but it ain’t bad.
  • Microsoft has no search branding at all, and tends to ruin every on-line product brand they get their hands on – they are a puppy strangler; why would they not make the same mistake with Yahoo search?
  • If technologically speaking Microsoft search technology is not much worse than Yahoo’s (that’s the general opinion amongst my tech kitchen cabinet), what do they see, except brand equity?
  • IF the Yahoo search brand is all they see, and they are notorious for mucking up otherwise decent technologies with crap branding, what will stop the newly acquired Yahoo search from becoming another windows Live Blerg?
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