4 Reasons Why Yahoo Got Stiffed

Many tech pundits endorsed the basic mission of the deal between Yahoo and Microsoft, but are harsh on the details.

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The Yahoo-Microsoft team-up (details here) was no shock to close observers of the two giants' long, slow courtship. But while many tech pundits endorse the basic mission of the deal--to share costs and revenue in the hopes of dethroning Google's search/advertising empire--many are harsh on the details. What's the predominant view? This is great news for Microsoft, which has been on a hot streak of good press since launching Bing, but a major blow to Yahoo.

Here are the four big reasons pundits think Yahoo got the short end of the stick:

  • Yahoo's giving up on its own technology: "In the end, Microsoft will hold all the cards." BusinessWeek
  • Ever heard of AOL? "AOL's search fortunes are hitched to Google. Yahoo's search bounty will be tied to Bing." ZDNet
  • Running the sales force will be a nightmare: "In our opinion, sales and technology are way too tightly linked in this business to split responsibilities between two huge companies that each have other things to worry about." Silicon Valley Insider
  • Investors hate that Yahoo's getting no upfront cash: "Yahoo's shares slipped into the mud on the deal's announcement." Digital Daily

Eric Lai at Computerworld offers a dissenting take. He gives three reasons why the overall deal is solid. But on Yahoo's net benefit, he admits he's less than wholly sanguine:

"While dropping Yahoo Search could leave the company vulnerable if Microsoft ever decides to abandon the deal, in the near term it will save Yahoo lots of money and help it reap billions, too."
This article is from the archive of our partner The Wire.