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Apple Should Buy Yahoo: Why I'm Now Convinced

14 points by nickb 18y ago

markessien 18y ago
Apple consolidating with Yahoo would create a formidable force, but it's likely not a relationship that is likely to work. The two companies have different styles, they have different markets, they have very little in common. A merger makes sense when the two companies together will function better than if they were separate - Apple can bring little to Yahoo and Yahoo can bring little to Apple. These are public companies, if you want a piece of them, go buy shares in both of equal amount. If you merge two car companies, a lot can be done - designers can be exchanged, common engine platforms can be developed and so on. There is a clear advantage to such a merger. But Apple and Yahoo? What will an OS developer do with a bunch of YUI developers? How will Apples experience designing a music player help with Yahoo Mail? Just because companies are known brands does not mean they should marry. Stop treating companies like they were Hollywood stars and speculating about who is in bed with whom, and who should finally hook up because they would soo fit with each other.
- mseebach 18y ago
  Google Android is about to kick the iPhone's ass. If Apple don't integrate vertically, they're going to be just a computer manufacturer - a really good one, but just that. They've had a taste of the vertical with iTunes music and app Stores and both have seriously limited business models. As the music industry opens up, any media player can integrate a music store, and in the long term, the market isn't going to accept a monopolistic distribution channel of software. Absolutely, there are a few ?'s in business model before the profit. But basically to compete with a Google+hardware business, there's only Yahoo+hardware, and if that hardware is Apple, it looks really attractive.
  - mechanical_fish 18y ago
    Google Android is about to kick the iPhone's ass. AFAIK there are no hard Android sales figures yet. Android's manufacturer predicted "more than 600,000" unit sales in 2008 (representing about 2-3 months of sales, from launch to end-of-year, spanning the Christmas season): http://www.mercurynews.com/businessheadlines/ci_10799172 http://www.mercurynews.com/businessheadlines/ci_10799172 Meanwhile Apple sold 6.9 million iPhones in the fourth quarter ending Sept 27, plus 11 million iPods, some of which were iPod Touch units: http://www.apple.com/pr/library/2008/10/21results.html http://www.apple.com/pr/library/2008/10/21results.html Note that very few people shop for Christmas before September. Wake Steve Jobs up when these numbers are closer. Meanwhile, if the "monopolistic distribution channel" of iPhone software ever becomes a serious handicap to Apple's sales, Apple will just end it, overnight. [1] They could open up the iPhone distribution model within a handful of weeks if they wanted to. It's mostly a policy decision. So I wouldn't build my business on the assumption that Apple is going to blindly follow their old path until it dooms them. --- [1] They've already shown signs of trying to do this with their music store. Apple sells DRM-free music from many labels and has publicly stated that they'd like to do so with all the labels. The likely reason why they don't is that the labels won't let them. The music labels are trying to use DRM-free music to grow Apple's competitors in a desperate attempt to prevent Apple from consolidating its dominance of paid music distribution. Such machinations aren't a consideration for iPhone software. The only reason Apple runs a closed iPhone software store is that they think it works better.
    - mseebach 18y ago
      > AFAIK there are no hard Android sales figures yet. No, and that wasn't my point, although I did hide that pretty well. See my answer to pxlpshr. > Meanwhile, if the "monopolistic distribution channel" of iPhone software ever becomes a serious handicap to Apple's sales, Apple will just end it, overnight. Yeah, and if they do, they're out of the vertically integrated business, and back at "just" being a very good hardware company. That's not necessarily a bad place to be, but I'm arguing that there are indeed synergies between Apple and Yahoo in a vertical integration that can actually be a real competitor to Google.
  - pxlpshr 18y ago
    Hahahah, Android is NOT kicking (nor about to kick) iPhone's ass... some of you early adopters need to stick your head out of the tech bubble and breath a little consumer reality.
    - mseebach 18y ago
      I don't own an iPhone, and I don't own an Android phone. Android kicking the iPhones ass was a hyperbole, but I do believe that the business model of the Android is better in the long term. In a few years there are, with a little luck, 10-15 different Android models, and just a few variations on the iPhone. Variation, options and non-vendor-lockin are good selling points.
      - jodrellblank 18y ago
        It's the variation and options that really drove Linux to the desktop during the 2000's. Everywhere I go, people ask me, disappointedly, why there are only half a dozen filesystems to choose from and expressing their sadness that a mere week of experimenting will do to pick between KDE/Gnome/fvwm/blackbox/etc. (You did note the recent news that Apple passed RIM (Blackberry) and Motorola to become the second most popular smartphone make, with just two the two very similar iPhone models?)
        thwarted 18y ago
        Does this apply with the cell phone handset market? A market that has been trained, from the beginning, based on differentiation of both crappy hardware and crappy software options AND on the lack of true portability of data and apps? It becomes easier to test out new hardware without having to test out new software and lose all your data (contacts, content, apps) at the same time. People seem to instantly get "If someone doesn't like the address book on an Android phone, there's at least the capability to replace it with something else that someone else wrote" (I think people see the value in this because the address book functionality on handsets is, in general, REALLY crappy) -- this feature has not existed, short of potentially second class Java apps that are difficult to acquire and install, on any other handset previously. The variations and options of Android will appeal to people who did not previously consider themselves to be members of the smart phone demographic. Android has the potential to put a smart phone in the hands of these people. And this market is, ultimately, larger than the potential iPhone market, what with more hardware and service vendors.
  - chollida1 18y ago
    > If Apple don't integrate vertically What do you mean by this? I'd say Apple is one of the most vertically integrated tech company I know. They don't just do their software, they do their hardware as well.
  - markessien 18y ago
    The Android is about to kick nobody ass. In case you didn't get the memo, Android on mobile phones kinda flopped. With Android, Google is being slow as hell, and this is killing them. Maybe Android for Netbooks has a future, but Android for phones will be in use mainly by cheap taiwanese phones.
natch 18y ago
Ewwwww. Remember Jobs' comment about Microsoft having no taste? Yahoo! has two faces: the open source advocating, hacking, library publishing, data sharing side we love, and the marketing side, which has a lot of engineering behind it, and gives us the Yahoo! look and feel complete with degree programs, male enhancement, and refinancing offers. Talk about a lack of taste. Cleaning up Yahoo! to Apple's standards would not be easy. It would be like trying to cut down a Winnebago to make a BMW. Possible maybe, but probably not worth the trouble.
parenthesis 18y ago
One of the hallmarks of Apple, especially since Jobs' return, is that they focus and specialise, and enter new markets very deliberately with a single product (which at most gets a few variations). So I don't see them making an acquisition that would at a stroke have their fingers in so many pies.
akronim 18y ago
Apple and Google are already very cosy. If Apple bought Yahoo that would probably raise a few antitrust issues for Google. Unless it's supposed to be a way to workaround that.
- anamax 18y ago
  > Apple and Google are already very cosy. If Apple bought Yahoo that would probably raise a few antitrust issues for Google. That's not how antitrust works and it doesn't make sense - closer ties to Yahoo by Apple don't increase Google's market power. Anti-trust issues could come up if Google discouraged Apple from working with Yahoo.
gabrielroth 18y ago
Everyone loves to make these arguments of the form 'Apple should buy x, because Apple has the ability to improve x in the following ways.' Nowhere does he address why it would be in Apple's interest to buy Yahoo. Apple is a hardware company; it makes money by producing objects and selling them to people. Yahoo is an advertising company; it makes money by producing content and selling ads next to it. If you want to argue that Apple should buy Yahoo, you have to explain why Apple should take a major stake in an area way outside its core competence.
- ahoyhere 18y ago
  You mean to say that the companies we want to love don't act altruistically (with billions of dollars) for the greater good of the entire internets!? Oh no, gabrielroth, please say it ain't so. I agree with you completely. If only people would be better at splitting these types of ideas into their respective categories of "hopeless fantasy" and "business decision that might make sense."
- karzeem 18y ago
  In fairness, the author did say that Apple needs Yahoo because iTunes search needs improvement. That doesn't exactly make the piece more persuasive, though.
lallysingh 18y ago
printf ("%s Should Buy Yahoo", query("SELECT NAME FROM COMPANY WHERE INDUSTRY LIKE 'COMPUTER' AND MARKET_CAP > 10e9")); Really, just go down the list and you'll see just as much* justification for any other company to buy them. * Where "much" means "little"
sanj 18y ago
Apple right now is the only viable, visible shot search has at innovating What?! That's a huge statement to make with no backup at all.
TweedHeads 18y ago
Apple shouldn't buy anybody. They should focus on producing the coolest gadgets year after year, forever and ever. That's what they do best.
GHFigs 18y ago
When as the last time commentators anticipated the acquisitions that Apple did make?
gry 18y ago
Apple seems to have its own timeline and agenda. If I were a betting man, I'd wager Apple would rather take an open source project, fold it into a hardware offering and drive the software's direction. Each piece gets them closer to shifting focus. I don't see how purchasing Yahoo! fits into this pattern. They are a large search company with a number of web apps. This is in diametric opposition Apple's strategy. Why would they all of a sudden make a splash in the search game by purchasing an expensive company? If they were to do search, it seems to me they would purchase a digital ink company, a yellow pages company, make yellow digital ink and call it a revolution. And we would love them for it.

14 points by nickb 18y ago

Apple consolidating with Yahoo would create a formidable force, but it's likely not a relationship that is likely to work. The two companies have different styles, they have different markets, they have very little in common. A merger makes sense when the two companies together will function better than if they were separate - Apple can bring little to Yahoo and Yahoo can bring little to Apple. These are public companies, if you want a piece of them, go buy shares in both of equal amount. If you merge two car companies, a lot can be done - designers can be exchanged, common engine platforms can be developed and so on. There is a clear advantage to such a merger. But Apple and Yahoo? What will an OS developer do with a bunch of YUI developers? How will Apples experience designing a music player help with Yahoo Mail? Just because companies are known brands does not mean they should marry. Stop treating companies like they were Hollywood stars and speculating about who is in bed with whom, and who should finally hook up because they would soo fit with each other.

mseebach 18y ago
Google Android is about to kick the iPhone's ass. If Apple don't integrate vertically, they're going to be just a computer manufacturer - a really good one, but just that. They've had a taste of the vertical with iTunes music and app Stores and both have seriously limited business models. As the music industry opens up, any media player can integrate a music store, and in the long term, the market isn't going to accept a monopolistic distribution channel of software. Absolutely, there are a few ?'s in business model before the profit. But basically to compete with a Google+hardware business, there's only Yahoo+hardware, and if that hardware is Apple, it looks really attractive.
- mechanical_fish 18y ago
  Google Android is about to kick the iPhone's ass. AFAIK there are no hard Android sales figures yet. Android's manufacturer predicted "more than 600,000" unit sales in 2008 (representing about 2-3 months of sales, from launch to end-of-year, spanning the Christmas season): http://www.mercurynews.com/businessheadlines/ci_10799172 http://www.mercurynews.com/businessheadlines/ci_10799172 Meanwhile Apple sold 6.9 million iPhones in the fourth quarter ending Sept 27, plus 11 million iPods, some of which were iPod Touch units: http://www.apple.com/pr/library/2008/10/21results.html http://www.apple.com/pr/library/2008/10/21results.html Note that very few people shop for Christmas before September. Wake Steve Jobs up when these numbers are closer. Meanwhile, if the "monopolistic distribution channel" of iPhone software ever becomes a serious handicap to Apple's sales, Apple will just end it, overnight. [1] They could open up the iPhone distribution model within a handful of weeks if they wanted to. It's mostly a policy decision. So I wouldn't build my business on the assumption that Apple is going to blindly follow their old path until it dooms them. --- [1] They've already shown signs of trying to do this with their music store. Apple sells DRM-free music from many labels and has publicly stated that they'd like to do so with all the labels. The likely reason why they don't is that the labels won't let them. The music labels are trying to use DRM-free music to grow Apple's competitors in a desperate attempt to prevent Apple from consolidating its dominance of paid music distribution. Such machinations aren't a consideration for iPhone software. The only reason Apple runs a closed iPhone software store is that they think it works better.
  - mseebach 18y ago
    > AFAIK there are no hard Android sales figures yet. No, and that wasn't my point, although I did hide that pretty well. See my answer to pxlpshr. > Meanwhile, if the "monopolistic distribution channel" of iPhone software ever becomes a serious handicap to Apple's sales, Apple will just end it, overnight. Yeah, and if they do, they're out of the vertically integrated business, and back at "just" being a very good hardware company. That's not necessarily a bad place to be, but I'm arguing that there are indeed synergies between Apple and Yahoo in a vertical integration that can actually be a real competitor to Google.
- pxlpshr 18y ago
  Hahahah, Android is NOT kicking (nor about to kick) iPhone's ass... some of you early adopters need to stick your head out of the tech bubble and breath a little consumer reality.
  - mseebach 18y ago
    I don't own an iPhone, and I don't own an Android phone. Android kicking the iPhones ass was a hyperbole, but I do believe that the business model of the Android is better in the long term. In a few years there are, with a little luck, 10-15 different Android models, and just a few variations on the iPhone. Variation, options and non-vendor-lockin are good selling points.
    - jodrellblank 18y ago
      It's the variation and options that really drove Linux to the desktop during the 2000's. Everywhere I go, people ask me, disappointedly, why there are only half a dozen filesystems to choose from and expressing their sadness that a mere week of experimenting will do to pick between KDE/Gnome/fvwm/blackbox/etc. (You did note the recent news that Apple passed RIM (Blackberry) and Motorola to become the second most popular smartphone make, with just two the two very similar iPhone models?)
      - thwarted 18y ago
        Does this apply with the cell phone handset market? A market that has been trained, from the beginning, based on differentiation of both crappy hardware and crappy software options AND on the lack of true portability of data and apps? It becomes easier to test out new hardware without having to test out new software and lose all your data (contacts, content, apps) at the same time. People seem to instantly get "If someone doesn't like the address book on an Android phone, there's at least the capability to replace it with something else that someone else wrote" (I think people see the value in this because the address book functionality on handsets is, in general, REALLY crappy) -- this feature has not existed, short of potentially second class Java apps that are difficult to acquire and install, on any other handset previously. The variations and options of Android will appeal to people who did not previously consider themselves to be members of the smart phone demographic. Android has the potential to put a smart phone in the hands of these people. And this market is, ultimately, larger than the potential iPhone market, what with more hardware and service vendors.
- chollida1 18y ago
  > If Apple don't integrate vertically What do you mean by this? I'd say Apple is one of the most vertically integrated tech company I know. They don't just do their software, they do their hardware as well.
- markessien 18y ago
  The Android is about to kick nobody ass. In case you didn't get the memo, Android on mobile phones kinda flopped. With Android, Google is being slow as hell, and this is killing them. Maybe Android for Netbooks has a future, but Android for phones will be in use mainly by cheap taiwanese phones.

natch 18y ago

Ewwwww. Remember Jobs' comment about Microsoft having no taste? Yahoo! has two faces: the open source advocating, hacking, library publishing, data sharing side we love, and the marketing side, which has a lot of engineering behind it, and gives us the Yahoo! look and feel complete with degree programs, male enhancement, and refinancing offers. Talk about a lack of taste. Cleaning up Yahoo! to Apple's standards would not be easy. It would be like trying to cut down a Winnebago to make a BMW. Possible maybe, but probably not worth the trouble.

parenthesis 18y ago

One of the hallmarks of Apple, especially since Jobs' return, is that they focus and specialise, and enter new markets very deliberately with a single product (which at most gets a few variations). So I don't see them making an acquisition that would at a stroke have their fingers in so many pies.

akronim 18y ago

Apple and Google are already very cosy. If Apple bought Yahoo that would probably raise a few antitrust issues for Google. Unless it's supposed to be a way to workaround that.

anamax 18y ago
> Apple and Google are already very cosy. If Apple bought Yahoo that would probably raise a few antitrust issues for Google. That's not how antitrust works and it doesn't make sense - closer ties to Yahoo by Apple don't increase Google's market power. Anti-trust issues could come up if Google discouraged Apple from working with Yahoo.

gabrielroth 18y ago

Everyone loves to make these arguments of the form 'Apple should buy x, because Apple has the ability to improve x in the following ways.' Nowhere does he address why it would be in Apple's interest to buy Yahoo. Apple is a hardware company; it makes money by producing objects and selling them to people. Yahoo is an advertising company; it makes money by producing content and selling ads next to it. If you want to argue that Apple should buy Yahoo, you have to explain why Apple should take a major stake in an area way outside its core competence.

ahoyhere 18y ago
You mean to say that the companies we want to love don't act altruistically (with billions of dollars) for the greater good of the entire internets!? Oh no, gabrielroth, please say it ain't so. I agree with you completely. If only people would be better at splitting these types of ideas into their respective categories of "hopeless fantasy" and "business decision that might make sense."
karzeem 18y ago
In fairness, the author did say that Apple needs Yahoo because iTunes search needs improvement. That doesn't exactly make the piece more persuasive, though.

lallysingh 18y ago

printf ("%s Should Buy Yahoo", query("SELECT NAME FROM COMPANY WHERE INDUSTRY LIKE 'COMPUTER' AND MARKET_CAP > 10e9")); Really, just go down the list and you'll see just as much* justification for any other company to buy them. * Where "much" means "little"

sanj 18y ago

Apple right now is the only viable, visible shot search has at innovating What?! That's a huge statement to make with no backup at all.

TweedHeads 18y ago

Apple shouldn't buy anybody. They should focus on producing the coolest gadgets year after year, forever and ever. That's what they do best.

GHFigs 18y ago

When as the last time commentators anticipated the acquisitions that Apple did make?

gry 18y ago

Apple seems to have its own timeline and agenda. If I were a betting man, I'd wager Apple would rather take an open source project, fold it into a hardware offering and drive the software's direction. Each piece gets them closer to shifting focus. I don't see how purchasing Yahoo! fits into this pattern. They are a large search company with a number of web apps. This is in diametric opposition Apple's strategy. Why would they all of a sudden make a splash in the search game by purchasing an expensive company? If they were to do search, it seems to me they would purchase a digital ink company, a yellow pages company, make yellow digital ink and call it a revolution. And we would love them for it.