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Ballmer's internal e-mail on Yahoo decision

What's next for Microsoft following its decision to walk away from its Yahoo bid? Below is the text of the internal e-mail message that Microsoft Chief Executive Steve Ballmer sent to employees today. (Also see Ballmer's letter to Yahoo CEO Jerry Yang, and Yahoo's response.)

This afternoon I sent the attached letter to Jerry Yang announcing that Microsoft has withdrawn its proposal to acquire Yahoo. We proposed the deal in the belief that a Microsoft-Yahoo merger would create a combined company with the resources and assets to win in the fast-growing market for advertising and online services.

Although the acquisition of Yahoo would have accelerated our ability to deliver on our strategy in advertising and online services, I remain confident that we can achieve our goals without Yahoo. We have a strategy in place to do so and we will continue to expand on this strategy and accelerate our progress.

Our strategy has three components:

  • Deliver on the basics. We will continue to improve search relevance and build out our ad platform.

  • Change the game through innovation. We will expand investments in engineering and deliver transformative tools and Web experiences.

  • Expand our global scale and focus. We will pursue partnerships and investments to realize the competitive advantages that come with scale.

    At the heart of our strategy is a commitment to bring the benefits of competition, choice, and innovation to everyone who uses the Internet--from consumers to content creators to advertisers.

    We are 100 percent focused on executing on this strategy and we have made good progress in a very short time. We've improved search relevance dramatically, introduced compelling new search verticals, successfully integrated aQuantive, and added nearly 100 new publishers to our ad platform. In the last couple of months we've rolled out new versions of key products including Internet Explorer and Silverlight, and introduced new technologies like Live Mesh. We now have over 430 million active users of our Windows Live services worldwide. And we continue to add new technologies with acquisitions such as YaData, which brings leading-edge behavioral targeting technology, and Caligari, which gives us advanced 3D modeling capabilities that will help us continue to improve Virtual Earth.

    Ultimately, our goal is to build the industry-leading business in search, online advertising, media, and social networking.

    We are absolutely committed to being the leader in each of these areas. Now is the time to do what we have always done best--be tenacious, focus on the long term, innovate, and keep working hard.

    I want to thank all of you for your patience during this process and for your dedication and hard work across all of our businesses. We asked that you remain focused on our goals through these cycles, and you have done this extremely well. We are committed to making the investments that will enable us to compete and, ultimately, lead in the online services and advertising businesses. Together, I know we will succeed.

    Steve

  • Posted by at May 3, 2008 7:51 p.m.
    Categories: ,
    Comments
    #124770

    Posted by flyingdutchman at 5/3/08 10:01 p.m.

    Bring competition by buying up the competitors. Ya, right, Steve. You've convinced me that all you are is a big giant goliath ready to gobble up anyone you think should be yours.

    #124773

    Posted by unregistered user at 5/3/08 10:29 p.m.

    I'm curious to know who leaked this internal email to you, Todd. I don't think it's very ethical on their part, or yours, to air internal company laundry to the public.

    #124774

    Posted by unregistered user at 5/3/08 10:33 p.m.

    Like Ballmer thought sending an email to 30,000 employees would somehow remain "private."

    By the way, which department do you work in at Microsoft? The Jehovah's Witness division?

    #124775

    Posted by billyT at 5/3/08 10:41 p.m.

    If you want to really do some good acquisition:

    WHY NOT BUY OUT CLAY BENNETT?

    Not just the Sonics, I mean BUY CLAY OUT COMPLETELY??

    #124778

    Posted by Arty Ziff at 5/3/08 10:52 p.m.

    Posted by unregistered user at 5/3/08 10:29 p.m.

    I'm curious to know who leaked this internal email to you, Todd. I don't think it's very ethical on their part, or yours, to air internal company laundry to the public.


    ----

    In the market for more chairs, Steve?

    #124781

    Posted by eagles2k3 at 5/3/08 11:04 p.m.

    This was the right decision. Yahoo's stock price will plummet on Monday and it will be much easier to buy them later. They are a dying company.

    #124782

    Posted by unregistered user at 5/3/08 11:22 p.m.

    this is the best move this time. Yahoo!'s days as a stand alone company are numbered. One way or the other, it will be subsumed by other internet players. The trial advertising partnership with Google is already an admission that Yahoo! cannot compete on its own. The talks with other companies also conveyed the same message. In the end, the losers will be Yahoo!'s shareholders.

    #124785

    Posted by unregistered user at 5/4/08 12:06 a.m.

    The main problem is the fact that a lot of people are forced to work with Microsoft's software at work. The result is a backlash from these people when they have a real choice.
    Me for instance, I refuse to use anything Microsoft at home, I firmly believe it is a through and through evil company with not a shred of moral ethics. So, whatever they come up with on their websites: no thanks, I'll use somebody else's search engine!
    Microsoft has also managed to alienate the people that were helping others to use their products. And I'm talking about the computer nerds that helped out world+dog to install/use/reanimate Windows on their home computers. We're all using other things now. And we have the power to change a lot of people over if we offer them the free help they used to get before.

    #124787

    Posted by Bud 03 at 5/4/08 12:31 a.m.

    I like yahoo, have used them for e mail, much better than my friends who have used msm....My DR said to start eating an apple a day, after having sooo much fun on Vista an apple will work.

    #124796

    Posted by unregistered user at 5/4/08 3:41 a.m.

    Balmer did nothing wrong - why do I say? He screwed with one of his ad competitors (yahoo) made them look like dog sh*t; smoked out Google and finally nothing like getting the troops at msft at least moving again..they have been lame competitors since the DOJ bullshit... Balmer had nothing to lose and a ton to gain on the competitive strategy side..finally good to see Yahoo get competitive or at least hitting the proverbial gym..

    This was doomed from day 1

    http://techwatch.reviewk.com/

    #124804

    Posted by SRM at 5/4/08 5:00 a.m.

    Yahoo stock will now plummet, Goggle will buy Yahoo . . .

    #124822

    Posted by unregistered user at 5/4/08 7:00 a.m.

    http://network-strategy.blogspot.com/2008/05/microsoft-yahoo-one-chapter-closed-but.html

    Todd: Good coverage on the story.

    Venkat

    #124828

    Posted by unregistered user at 5/4/08 7:35 a.m.

    Local virtual communities will continue to grow and will grow its own search engine by tagging. A human compiled search engine with higher relevancy.
    Internet Protocol for peace

    #124832

    Posted by Hightechman at 5/4/08 7:50 a.m.

    Dear Steve: You have have served our company long enough it's time to go. We've been through 55 re-org's and none have made us better. You;ve brought in top level manager after top manager from IBM, to Adobe, to Oracle and have yet to produce "real" leadership.
    We've bought little companies and tried to move them into our stack -with minor success. There no "pop" in Microsoft - not now and not in the last 5 years. You've asked us to read "Good, to be great"- we're in the Doom Loop- the doom loop is characterized by reactive decision-making, an overextension into too many diverse areas of concentration, following short-lived trends, frequent changes in leadership and personnel, loss of morale, and disappointing results.

    Steve, think about it.... You are standing in the way of making Msft great.

    Okay?

    #124846

    Posted by wolfshead at 5/4/08 9:06 a.m.

    I remember the first time I was rejected. I'll never forget her...I was heartbroken...*sniff*

    #124881

    Posted by unregistered user at 5/4/08 12:09 p.m.

    I can think of a few late cycle venture backed companies that are definitely in the "doom loop" and for that matter a few local vc's as well. Microsoft is not in a 'doom loop". While true a company this large will be prone to regular reorgs as the organization breathes in and out people, ideas, themes, styles, technologies and companies, it does not mean the company is reacting foolishly. A previous post smartly identified the ability for microsoft to discover other agenda's in the market place, in particular with google, but with others including newscorp, aol, etc. One little thought here is that google may eventually overplay its position in the word of ads and may come under anti-trust/anti-competitve scrutiny which will become a headwind for them, and a potential advantage for microsoft in the next 5 years - and microsoft is now filled with a bit more knowledge of how the market will react. BTW, the letter from Balmer to yahoo was highly rational, logical in approach, whil Yahoo's response was lacking - a tough position for Yahoo's board to now justify rejecting the offer in favor of what (no clear value creation other tha for google).

    #125015

    Posted by unregistered user at 5/5/08 5:43 a.m.

    "Microsoft has also managed to alienate the people that were helping others to use their products."

    They did?

    "And I'm talking about the computer nerds that helped out world+dog to install/use/reanimate Windows on their home computers. We're all using other things now."

    We are?

    "And we have the power to change a lot of people over if we offer them the free help they used to get before."

    Yes, so far the people I have helped upgrade to Vista 64 bit have been very happy, and have told me "Why is everyone so down on vista?"

    All I can tell them is "Fanbois"

    #125289

    Posted by unregistered user at 5/5/08 3:29 p.m.

    Repeat again, Msft is in the Doom Loop. And all the Lieutenant, Colonels and Generals are in denial.

    There no POP at MSFT. It wasn't Vista or Office 2007.

    Look at MacIntosh. Steve Jobs has excited the world with his shops and products. Ipod, Iphone, MacAir book even the mini-Mac. You go into their store - large sign-
    Ask a Genius- pick up a phone.

    Nobody thinks of asking a genius when then call MS Premier Support and Services. MSFT has lost the "hearts and minds" of the 16- 22 yrs. Wait five years - those nerds will making enterprise decisions next. It's only a matter of time - that CIO's, CTOs and CEO see little in long agreements with MSFT.

    Msft is over extended. Morale is low and everyone is looking for a better place to work. It's no longer One Microsoft Way.

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