Furrier.org - Business & Technology Blog

Today’s Microsoft retreat is a victory for Silicon Valley and all the startups.  Now that the troops are pulling out of Silicon Valley everyone is jumping up and down eager to get down to business - except the bloggers who are all trying to figure out what happened (not including Kara Swisher she was on top of this story from day one).

This outcome was clear to me from day 1 - Yahoo would fight to the death rather than roll over and take it up the butt from Microsoft.  As this chapter of history comes to a close the story is bigger than what the stock number was or one particular issue.  It was bigger than all of that.  As I wrote in February it was the Silicon Valley Poison Pill in action.  The culture in Silicon Valley is deep in tradition and this trophy in Yahoo was not going to Redmond.  Hey I’m a big fan of Microsoft and Dan’l Lewin here in Silicon Valley (except that blogger idiot Mark Ashton), but the culture of Silicon Valley just won out.  This is going to make one great John Markoff story for the NY Times. - go ahead John run with it.

Another story line here is the big win for all those starving Web 2.0 companies looking for a partner - Yes Yahoo will remain free to be a real force in the Web 2.0 community again.  Now with open social (yes reported here first) and with upcoming announcements of Yahoo opening up.  Yahoo is born again.  As we the kids cheer in baseball Yahoo employees are cheering - “2 out rally….2 out rally….2 out rally…2 out rally”.  If this doesn’t wake up the dead at Yahoo nothing will.

This is a win for Web 2.0 and startups around the world but mostly a big win for Silicon Valley.   Yahoooo

Don’t forget how Google is loving this.

Mike Arrington had a great post this morning on Yahoo’s decision time.   Love the war reference. Mike agrees that Silicon Valley will be a war zone with collateral damage. The rats are already leaving the ship as predicted by Josh Kopelmans post today.   I’ve always loved Yahoo, but no matter what happens their fate is sealed.

The Microsoft invasion is happening and Google isn’t Netscape. Google is executing. This war will certainly be epic.

I’ve said that you can’t compare this Microsoft to Microsoft of the mid 90’s, and you can’t compare Google today to Netscape of yesterday.  Google is excuting and Yahoo isn’t.  It won’t be an easy fight for Microsoft.

As an aside I received an interesting comment from a Microsoft insider the other day.  He says “Since you’re thinking about MSFT/YHOO, my 2c: First, it’s a $44 billion admission that MS couldn’t get search and advertising right. Second, the culture clash will be dramatic. The only good part about it is that MSN could never decide if it wanted to be Google (alpha engineers) or Yahoo (content gods); now they’ve implicitly chosen the latter. We’ll see if that works. The trailblazers are actually aQuantive. They were assured that the MS engineers would do what the aQuantive biz people decided. Too early to tell if that’ll actually work, but it’ll be a leading indicator for the success of the YHOO acquisition. I’m not sanguine…”

The next logical question in this epic battle is “who is leading the troops for Microsoft”?  Looking at Microsoft leadership (the generals) will speak volumes about their plans to occupy Silicon Valley.  

Google answers Microsoft two days after Microsoft invades Sunnyvale.   Google is not backing down.  This is going to be good.   John Markoff writes a piece that this will actually be good for Silicon Valley.  I am not sure but it will be fun to watch.  Google is not Netscape.  

People: we are in a full-on WAR between Microsoft and Google.  Now Google fires back in a blog post saying Microsoft’s unsolicited $44.6 billion offer for Yahoo Inc. “raises troubling questions.”

Google’s blog post, by Google Senior Vice President David Drummond, asks whether Microsoft could “now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC.” It accuses Microsoft, which has been targeted by antitrust regulators in the U.S. and Europe for years, of “frequently seeking to establish proprietary monopolies — and then leveraging its dominance into new, adjacent markets.”

This blog post by Google is a complete smoke screen.  It is clearly a knee jerk reaction to Microsoft’s sneak attack into Silicon Valley last week.  I’m sure right now Google executives are jamming on  a counter attack.  They have to - Microsoft just invaded Sunnyvale.    Word inside Google right now - ‘calling all arms’.

As an entrepreneur you have to understand your environment, an no better time than now.  As big businesses try to figure out their place in this war so do startups.  That brings me to business models of WAR.

What do startups need to do - be a supplier of something.  Something of value and need in wartime.  Picks, shovels, food, shelter, arms, hostages,,.etc - figure it out because the WAR is on.

As John Markoff wrote today on Silicon Valley’s venture view…“There is a sense here among investors that Microsoft, as a more effective counterweight to Google, might actually serve to spur innovation in the Valley.  “When Microsoft was in the ascendancy, there were whole areas of investment that were of less interest to investors,” said William R. Hearst III, an affiliated partner with the venture capital firm Kleiner Perkins Caufield & Byers. “Now you could enter a new area and people will think that maybe one of the two colossuses will be interested in acquiring your start-up.”

Translation:  the opportunity for startups:   be a ‘WAR time” venture.

Joe Nocera of the New York Times writes that Microsoft is really a tired competitor.  Not sure I agree that Microsoft doesn’t have the weaponry - under the right battle plan I think that they can compete and surpass Google.  What I am sure of is that Microsoft will not ”kill” Google.    Nevertheless, Google isn’t Netscape. 

Although there are many differences between Google and Netscape, the big difference is that Google is a multifaceted cash producing machine and Netscape was a one trick poney - the browser.  Netscape was an easy target for Microsoft at that time.  Today, Microsoft is fighting a different competitor.  Google has great cash flow and control of the most coveted market -  online advertising.  This fight for Microsoft is to the death.  Microsoft is the underdog not Google.  A case can be made that Microsoft is the Netscape and Google the old Microsoft - the tables are turned.    It’s going to get bloody.

 As I mentioned yesterday Microsoft is officially waging “War” against Google, Microsoft needs Yahoo.  Why?  Two reasons:  it’s search position and it’s user base of registered users.  The rest of Yahoo will fall into a product group or get ‘whacked’.   If this buyout goes down in Microsoft’s favor , then there will be a ‘ton’ of collateral damage at Yahoo.

As the president ial elec tions (can use those political keywords because of a Techmeme flaw) is down to two person races, the Internet battle has been waged.  WAR!  It’s official.  It’s now a two company race:  Google and Microsoft.

I’ve been seeing the battle of the titans coming for sometime, but this is the open gambit of a World War between Microsoft and Google. - the rest of the Internet world is whitespace. 

I was writing up a review on the Google earnings while on a plane coming back from Flordia to Houston.   Two words sum this up: holy shit.

More to come… I have to get on a plane to SJC from Houston.  Unbelievable with impact to all.  This is an A-bomb.  It will affect big companies and startups.  Wow.