Please Don't Let Microsoft's Ballmer Screw Up The Internet

    Posted by Pete Caputa on May 2, 2008 12:02:00 PM

    This whole Microsoft going after Yahoo for market share really pisses me off. I've drafted a few blog posts that will most likely remain unpublished as they used a lot of explitives.

    Microsoft has tried to dominate the internet before. They've obviously failed. Not because of Google. But, because the internet is quite difficult to dominate. People figured out that they could go to other websites after they opened Internet Explorer, even though the browser set their page to MSN.

    That doesn't mean we can sit back and pretend like the internet can't be dominated. Or that short term consolidation isn't bad for the internet. It could be dominated if we let it.

    A handful of big companies are trying their damndest to keep eyeballs coming back to them. And competition and serving people's information and entertainment appetite is cool. But, having one less of these companies competing is not cool. Having one less place to efficiently advertise online is not cool either. Which is what MS hopes to accomplish by merging their online advertising inventory and systems with Yahoo's.

    Unfortunately, or fortunately, I had a few beers on Thursday night and felt compelled to weigh in over at the Silicon Valley Insider. Here's my comment:

    You guys are all a bunch of aholes. Microsoft buying Yahoo would be a huge blow to innovation and competitiveness in the internet industry.

    There's a really simple solution. It's called a FAPI. That's Freaking Application Programming Interface.

    Let your damn ppc interfaces bid on each other's platforms, Yahoo and Microsoft. It accomplishes the same damn thing: building critical mass of advertisers and inventory to compete with google adwords for domination of the internet ppc advertising business.

    Mergers and acquisitions are so old school. If Ballmer new his ass from web 2.0, he'd have figured this out.

    Yet, you money grubbing internet-clueless investors are going to fubar the whole internet if this acquisition occurs.

    Now that might be a little dramatic. But, it's certainly not too far off. If MS combined with Yahoo, we'd have only two places to buy pay per click ads, the most efficient advertising vehicle on the planet, until we figure out how to arrange stars into clickable logos.

    Fortunately, for us, Yahoo understands this. From an article this morning:

    As envisioned, the system would employ a real-time auction that would draw ads from Yahoo, Google, and potentially other companies including Microsoft. The ads would be selected on the basis of maximum revenue, which would be shared between Yahoo and the other search partner, the Journal said.

    It's called coopetition. And it'd be best for Yahoo's Google's and Microsoft's share price. It'd also be good for upstarts that found a way to differentiate their ad systems or sell them more effectively than the majors. Think Clickable, Quiqo, Adbrite, Tacoda, etc. It'd also, and probably most importantly, be good for advertisers looking for the most efficient vehicles to advertise their products and consumers trying to find the best products and services.

    Unfortunately for us, Yahoo isn't exactly in control over its own destiny right now. It's the mouse. Microsoft is the cat chasing it. We need to step in with a broom and swat the cat. It's up to the investors in both companies, current and potentially future board members installed through Microsoft's potential hostile takeover bid - to thwart this thing from happening.

    But, it's also to a certain degree, in our hands. I can't imagine that investors really think Microsoft's and Yahoo's cultures and initiatives will really mesh well together and outproduce google. But, it seems like they're a bit too focused on making a few bucks in the short term.

    Maybe they need a bit of education about the internets and what's possible through an API and a bit of coopetition.

    If you agree and you'd like to make a difference, please spread the word, so that investors see how bad a deal this is for the longer term prospects of the internet and these respective businesses.

    This could be a turning point in the internet, where closed networks supercede one giant open equal opportunity system.

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    Topics: internet advertising

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