Microsoft Yahoo then Facebook? Rejected – Microsoft Did Bunker Down in Palo Alto

Silicon Alley Insider has an interesting tidbit that confirms my story on June 19th that Microsoft was bunkered down in Palo Alto. It was that weekend that had Microsoft and Yahoo folks all over Palo Alto.

Henry Blodget writes on his blog today the details of what transpired on the weekend prior to June 19 as reported here on Microsoft was in town to consummate the deal in Palo Alto as well as make a run at Facebook. It’s clear now they did make a run at Facebook but was rejected. Now Microsoft is trying to get support from the other players to stitch together a search plan. With Powerset now in the stable. Microsoft is moving to what looks like an orchestrated maneuver to get a search and online story fast.

He writes “Today’s Wall Street Journal, however, echoes reports that Yahoo left out at least one embarrassing detail from its “Microsoft timeline”–one that confirms that the excuse it used to reject the deal for months was nonsense:”

[On Saturday, May 17, in Palo Alto, Calif., two weeks after Microsoft walked], Yahoo CEO Jerry Yang, director Ron Burkle and chairman Mr. Bostock met with Microsoft’s Mr. Ballmer. Messrs. Bostock and Burkle told Mr. Ballmer they were prepared to sell Yahoo for $33 to $34 a share, the price range Microsoft had offered before talks broke down, according to people familiar with the meeting. That would have valued the deal at about $47 billion, or $6 billion less than Yahoo’s previous asking price of $37 a share

Microsoft was moving to get Yahoo search and had the messaging ready then was off to put the ‘checkbook’ in front of Facebook. They were pushed aside. Microsoft isn’t getting both of them but will mount a campaign to get equivalent “pieces” to compete against the ‘tide’ that is search 2.0 and social networks.


Duh? Microsoft – No Brainer – Go Faster Please

Microsoft is bragging about how more than 1 million entrepreneurs have recognized the need for a Web presence in today’s digital world.

I don’t know what they are celebrating this for. The world wants web services not bloated software on a device. Please hurry up and get all of the Microsoft Office and other stuff online fast.

Make it free or freemium. Run Microsoft Run. Go faster.

Powerset is Booting Up to Microsoft – Microsoft Buying Spree Has Started

As speculated here at first and confirmed by my sources Microsoft left the Yahoo bedroom with the intention of buying up the farm to get a foothold in search. Well folks… game is back on. Matt Marshall is reporting that Microsoft is paying north of $100 million for Powerset. .

Matt’s article is well researched and written. It’s good in depth reporting so I won’t rechew on his stuff. Go there it’s worth a read.

Here is my take.

I knew Powerset was in discussion with Microsoft but I had no idea that this would go through this fast. Powerset is not even ready for prime time according to sources close to the company. The product barely works at scale and I’ve heard of some linguistic issues on their approach.

What does this mean?

This is all about Microsoft buying up the talent in search anything. Smart move. i think so. Overpriced: Yes. But if you think about the talent and the team it is justified.

Semantic search is a moving train. Cracking the code goes way beyond just software advances. Semantic search now intersects data, software, infrastructure, services, and devices. Wait that sounds like Unified Communications.

The Quiet Google Microsoft Battle – Unified Communications Front

With the recent Salesforce Google announcement among other recent moves, it’s clear that Google has a full on push to get a position in the Unified Anything market – Unified Communications.

I sat down with Eric Swift, Senior Director, Microsoft Unified Communications team where he answered the question on how Microsoft views to compete with Google.

Here is Eric’s answer – a video post at

Microsoft Has To Be Pissed – Google the White Knight

Kara Swisher has a detailed report of the Microsoft offer to Yahoo. Microsoft has to be pissed.

What we have hear is a failure to communicate (name the movie). Yahoo did the ‘godfather’ deal with Google. Google is Yahoo’s white knight – period.

It’s a smokey back room deal that saves Yahoo from clutches of Wall Street and an escape from the frontal assault from Microsoft.

Microsoft’s only move? Burn the village and buy up the market. I expect Microsoft to go on a rampage and buy up everything that moves. They have to retreat and regroup.

Microsoft’s move: change the game. Google won this battle.

SAI has a great writeup on the details and implications on the Yahoo pass on Microsoft.

It’s the Silicon Valley poison pill.

Zuckerberg’s Opportunity – The Silicon Valley Way – Be Extraordinary Create the Market Make Money; It’s All About the Founder

Kara Swisher writes a memo to Mark Zuckerberg about the possible scenarios facing Facebook. She references my post called Facebook IPO – It’s Microsoft Not The NASDAQ . I see this as an opportunity for Facebook. Recently Facebook has been hiring ‘quote seasoned executives’. Facebook’s future is in Mark’s hands – it’s all about the founder.

Silicon Valley has two kinds of companies: 1) build real long term value for employees, investors, and build a great culture, and 2) build a value proposition (venture backed) and sell making the venture capitalist rich and the founders rich. We haven’t seen the kind of company like HP, Apple, or Google for some time (obviously Google is most recent). We have seen tons of companies sell out.

What makes a great company? The Founder and the founding team – Bill and Dave; Steve Jobs, Sergey and Larry; Facebook is stuck in the middle here. Strong founders with passion and drive to build a long term viable company and a cast of characters with ‘seasoned experience’. What’s more important seasoned execs or young and hungry founder led teams?.

In the final analysis it’s all about the founders. When founders get replaced the companies usually die. Why? Because Founders know best.. Founders see things others don’t. Founders can do deals, hire employees, lead people, create products, and do things differently. Founders are extraordinary people. Mark is one of those founders. He’s done amazing things at Facebook. The question is what does he do next.

The Silicon Valley Way is to build great companies, create markets, AND, create wealth for stakeholders (including employees – they don’t have employeess ‘resting and vesting’). Mark as CEO of Facebook has an opportunity now. He is at an inflection point. The same inflection point Bill Gates had when he had to negotiate his way around the big IBM monopoly to get a ‘killer’ license deal for DOS. Remember Google when they did something no one thought was possible – they ran their IPO as an auction and create dual classes of stock. Why? Because the founders were extraordinary.

My advice to Mark – do something extraordinary – stop the PR Bull; Make a strong move in this market – Be Extraordinary.

Microsoft needs you and you need Microsoft – If that doesn’t work substitute Google for Microsoft.

Mark: you are in the drivers seat. Take the cash and structure something extraordinary. Remember going public isn’t the dream job – shareholder bickering, filings, tons of BS.

This is an extraordinary situation in a time in history where conventional wisdom is irrelevant.

UPDATE: NY Times DealBook has a great followup post to my post Zuckerberg Opportunity. The professor Steven Davidoff pens a detailed post around some of the tactical challenges around the Zuckerberg Opportunity

Facebook CEO Responds to Rumors – Stresses They Won’t Be Sold

Facebook is saying that they want to be independent but it’s what they aren’t saying that’s very telling.

Facebook CEO Mark Zuckerberg stresses in a Reuters story that Facebook will not be sold. In response to my blog post of the rumored Microsoft move post Yahoo Search buy this week, Mark denies any deal.

The fact that he is so defensive creates an interesting posture for Facebook. Coverage is so deep on this possible Microsoft Facebook move that something is brewing and fast. I think that it’s a good move for Microsoft to make a bid for Facebook. A Microsoft Facebook combination puts a credible force to compete with Google. Many of the bloggers agree this is a good possibility for both Microsoft and Facebook.

Facebook’s recent moves say alot about what’s going on. For example Facebook is so afraid of Google that their move to shut down Google’s Friend Connect is their version of a ‘save me cry’ except it’s a cry to Microsoft. Their move to shut down Friends Connect is like Yahoo saying to Google save me from Microsoft. Now Facebook is basically saying Microsoft save me from Google.

All unfolding.