Ballmer’s Folly ends: Microsoft abandons Yahoo bid because of Google

“Google proved to be the final straw that broke Microsoft CEO Steve Ballmer’s back,” Yi-Wyn Yen reports for Fortune.

“After weeks of threatening Yahoo that the software giant would attempt a hostile takeover if the company refused its bid, Ballmer explained Saturday why he decided to withdraw his offer for the Internet portal. He was walking away because of his archrival Google,” Yen reports,

“Yahoo would become ‘undesirable’ if it formed an alliance with Google, Ballmer said in a statement. Last month, Yahoo had outsourced some of its search advertising results to Google in a two-week trial. The Internet portal said it was considering a long-term partnership with Google and that a deal could be announced as early as next week, a source familiar with the matter said,” Yen reports.

Full article here.

Excerpts from a BusinessWeek interview with Apple CEO Steve Jobs, October 12, 2004:

Steve Jobs: Apple had a monopoly on the graphical user interface for almost 10 years. That’s a long time. And how are monopolies lost? Think about it. Some very good product people invent some very good products, and the company achieves a monopoly. But after that, the product people aren’t the ones that drive the company forward anymore. It’s the marketing guys or the ones who expand the business into Latin America or whatever. Because what’s the point of focusing on making the product even better when the only company you can take business from is yourself? So a different group of people start to move up. And who usually ends up running the show? The sales guy… Then one day, the monopoly expires for whatever reason. But by then the best product people have left, or they’re no longer listened to. And so the company goes through this tumultuous time, and it either survives or it doesn’t.

BusinessWeek: Is this common in the industry?
Steve Jobs: Look at Microsoft — who’s running Microsoft?

BusinessWeek: Steve Ballmer.
Steve Jobs: Right, the sales guy. Case closed.

Source: The Seed of Apple’s Innovation

67 Comments

  1. Good, now I can continue using Yahoo without worrying about it going to hell after a Microsoft acquisition. ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

  2. *whew*

    I realize Yahoo’s future is still somewhat uncertain, but at least Yahoo’s properties and open-source efforts won’t be usurped/destroyed by Microsoft. The internet is better off with an independent Yahoo.

  3. Don’t forget that you are dealing with the Borg. These soulless creatures are more tenacious than starving pit bulls at a wiener roast.

    Come Monday, Yahoo! stock takes a big dive.

    Yahoo! shareholders are none too pleased.

    The Borg lets the kettle boil and then returns later with an offer significantly above Yahoo!’s lower stock price, but below what the Borg previously offered. Yahoo! stockholders pressure Yang to take it while he can.

    Monkey Boy dances screaming: “Dividends, Dividends, Dividends!” Scary, huh?

  4. There’s NO way MS backed down over a Yahoo/Google alliance.

    Ballmer is being surprisingly modest. Something happened. I’m betting some adult supervision somewhere (the bankers, the lawyers, MS’s own board) finally stood up to him.

    If anyone’s watching this, it should be Steve Jobs. As screwed up as MS is, this means they aren’t completely clueless.

  5. @ sparkplug

    Drat… my relief overwhelmed my critical thinking, you unfortunately paint a likely scenario. There was even a recent story I read about how Microsoft could step away from the deal for the time being, then pick up Yahoo on the cheap a year or so from now if things go badly in Sunnyvale. Sadly, that’s still a possible future…

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