REEELOOOAD!!!

“Had to reload, had to rewind. It’s a standard reset, no long ting.” – MC Skibadee @ NYE/NEC Drum n Bass Event 2008

Whilst I would hardly deem the tactics “standard”, the Microsoft-Yahoo state of play has seen this reload/rewind situation unfold, with Yahoo! trying to back-pedal their rejection of Microsoft’s $33 offer. After the last 5 days of frantic maneuvering we can’t predict what comes next, but we can say that it won’t take long to happen.

My internet connection has been wobbly over these last few days, making blog-reading a challenge and quite exciting when the bursts came in. All sorted now. This screen shot taken of my Gmail shows just how much coverage the pair have had:

It seems that for a time I was the only person happy that Microsoft had walked away from the deal. I’m a big user of Yahoo! services, mainly flickr and delicious, and don’t want anything to change with these services. I also like that there are a “Big 3″ of the internet – Microsoft, Google and Yahoo! – because everything in this universe comes in 3’s (a theory that will discussed in the future on my openness tumblog).

The question on everyone’s mind now is “What’s next?”

We’ve seen a real shambles of negotiation, and I enjoyed reading Henry Blodget’s extensive coverage where he discusses the seemingly amateur nature of a certain CEO’s performance. I believe that walking away from this deal came from Steve Balmer losing his temper combined with a slight delusion that this could be a smart move if it drops the Yahoo! value to a price that’s “not a dime more” than what it ’should’ be; but also because Jerry Yang has been a very stubborn founder throughout this period and has refused to accept that his company is worth anything less than what he sees it as being worth. To both sides of this equation: GET REAL. Please take some time to think properly about the outcome, where you want to end up, and what decision your stakeholders really want you to arrive at.

Either Microsoft and Yahoo! will get back to the table and work out a deal properly for a value currently estimated at $34, or the walking away gesture finds its roots and we watch Yahoo! get tied up with Google and AOL. I’m still semi astounded that despite the deadline for decision making, despite the supposed end to all this with Microsoft walking away, and despite the real flux that respective valuations have found themselves in, we are all STILL confused as to what will come next, and there’s still more than one potential outcome.

My next question is who will be in Microsoft’s sights next? Microsoft need to adopt a web presence and they seem unable to do that without acquisition. Could they snatch up AOL like pulling the rug out from under Yahoo!s feet? Peter Kafka believes Facebook (SAI 25 Live no.1 spot at the moment) could be an option. That’s not wildly inappropriate seeing as Microsoft have already bought an ad slice of the ZuckSpace. If they’re looking for a social network, LinkedIn might be an option which they could go on to leverage for business use, although something tells me they’re looking to spend serious cash to ensure a better chance against Google.

Microsoft’s latest offering Live Mesh is being deemed by many harsh (and overly critical) M$-hating journalists as an idea that completely misses the point. I can see what they mean, having run my Digital Nomad project, all services are moving to the cloud so that user experience is the same across platforms, and we only have to worry about the browser we use. They are missing this huge glaringly obvious fact though – just because web2.0 means you CAN doesn’t mean that everyone in the world DOES yet.

The cloud represents the next phase in technology and human interaction with it, that’s unquestionable. At this point in time there are problems- it creates concerns about privacy and security, not to mention the fact that not every computer in the world is connected to the internet. Mesh is the right idea for Microsoft at this phase in their product life cycle, because it sees their users encouraged to own all the devices that are available and effortlessly (ok, that part remains to be seen) sync them all and use them from other devices.

This mesh system looks to start the paradigm shift from local desktop activities to a harmony of synchronised files, tasks and processes on a series of machines and devices using the cloud to achieve this. Presumably users can also expect some flavour of collaboration and sharing experience to go hand-in-hand with this. We can assume that stage 3 of this system would then look to migrate users entirely out onto the cloud.

In the same way that Microsoft’s size and maturity makes quick and scaled change a real mission, it can look to its heavy adoption by users worldwide to make this thinking acceptable. For the mean time, having a stronger web presence seems out of reach, and acquisition is Microsoft’s only smooth route. Developing that web presence would give them time and means with which to build up services ready for integration with Live Mesh, but wait – wouldn’t that mean Microsoft would be pioneering user experience and the relationship between local and cloud based features?

Steve, you should have bought Yahoo!