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Microsoft has a history of either arriving too early or too late to the party. In the case of search engines, they were too late. However, Microsoft has a not-so-secret weapon — money! Regardless of when they get to the party, they often times simply end up buying it, including the crappy band playing at the party.
Such is the case with Microsoft's new unsolicited bid to buy Yahoo!. Microsoft is offering $44.6 billion in cash and stock for search engine operator Yahoo Inc. in a move to boost its competitive edge in the online services market. This offer comes on the coattails of Yahoo!'s declining stock and recent announcement of 1,000 layoffs. Danny Sullivan has more details about the Microsoft offer on Search Engine Land.
It would seem that for many people, Microsoft's offer to buy Yahoo! is not a welcome thing. They see it as a threat to something good, namely Yahoo!'s services and brand. However, I see things in a very different light. I see it as a chance for Microsoft — regardless of how much I don't care for them as a company — to get things right. If they can acquire Yahoo! and take a similar approach that Yahoo! has taken with their own acquisitions — like maintaining the branding of MyBlogLog, Flickr and del.icio.us — they have an opportunity to redefine themselves and their own image.
An infusion of cash from Microsoft and new synergies between each company's Web properties would also provide the best challenge to Google's domination. Microsoft and Yahoo! are two very smart and strong companies, so if they can integrate their resources well and fill in each other's gaps, then they may actually have a fighting chance against Google's lead in the market.
Oh, but what will happen to Live? I think "Live" will live on. It may become it's own marginalized service or you might see a hybridization of Yahoo!'s and Microsoft's Web applications into something called "Yahoo! Live." Regardless, I doubt that we've seen the last of of Live, and it may be that infusing it with Yahoo!'s brand, instead of Microsoft's, might be the kick-start it so desperately needs.
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