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Yahoo deal is over, so what startups will Microsoft buy?

P-I reporter Todd Bishop has been covering the Microsoft-Yahoo saga on his blog, with a time line of events, Steve Ballmer's letter to employees and other interesting tidbits.

But his story for tomorrow's paper asks the all important question of what's next now that the deal is off the table.

One thought: Microsoft will gobble up smaller Internet players. That's gotta to be music to the ears of entrepreneurs and venture capitalists, many of whom who would be more than willing to have the $44 billion that Microsoft had planned to spend on Yahoo spread around to 20, 30 or 40 companies.

In his e-mail to employees, Ballmer even alluded to the possibility of new partnerships and investments.

And Microsoft has shown its willingness to make these smaller purchases, most recently the $115 million deal for Seattle online travel startup Farecast.

Just for some perspective. Microsoft could buy the equivalent of nearly 400 Farecasts with the money it saved on the Yahoo deal.

So who might Microsoft pursue?

Bishop's story notes AOL, MySpace and Facebook, while VentureBeat tosses out names such as Twitter, Digg and Meebo.

Of course, it will all depend on where Microsoft plans to put its energy -- trying to dethrone Google in online search or holding onto its lead in business applications.

Microsoft could try to do both, though focus is absolutely key in any business.

Having spent three days at the local search and advertising conference last week, I could see Microsoft spending some time to crack that nut. (Seattle companies such as Marchex and AdReady play in that arena)

Delivering business applications over the Web is a natural place for Microsoft to expand, so collaboration tools (Smartsheet.com's Brent Frei is quoted in Bishop's story) or email services. (The Xobni rumors may finally come true.)

What about LinkedIn? Or Salesforce.com? Or a smaller Salesforce competitor such as Seattle's Entellium?

Really, there are all sorts of possible combinations out there. One good place to look for clues is Microsoft's Startup Accelerator program, where it lists about 40 startups that it is working with.

Who do you think Microsoft will try to buy?


Posted by at May 4, 2008 7:24 p.m.
Categories: ,
Comments
#125011

Posted by unregistered user at 5/5/08 5:05 a.m.

I'm doubtful that they'd buy AdReady. As much as I like the concept, I'm not entirely convinced it's that hard to replicate and small businesses would prob get a much higher ROI by doing a better job with their search ads before delving in to display.

On the other hand, Marchex might be a interesting consideration given that they seem to be doing something right (I believe they're profitable).

Of course, the other option is to develop a search engine that comes up with relevant results.

#125041

Posted by unregistered user at 5/5/08 7:38 a.m.

Agreed. A search engine with relevant results would be a good place to start...

#125053

Posted by unregistered user at 5/5/08 8:20 a.m.

marchex makes perfect sense--they have several ad measurement technologies that would play nicely with aquantive, a local ad network of some scale, a contextual ad network called industry brains, an SEM business with tens of thousands of advertisers, and a voice company that marries well to tellme

#125064

Posted by unregistered user at 5/5/08 8:39 a.m.

Forget the ad space altogether. It's time that Microsoft to show the long term vision that created their success in the first place. Clearly there are far more valuable, provocative and lucrative problems for technology to solve than consumer spending and entertainment. It's time for the Blue Monster to think bigger thoughts.

#125076

Posted by unregistered user at 5/5/08 8:57 a.m.

How about a company like DS-IQ? It's an emerging space with a really solid mgt team that would seem to complement the direction that MSFT is already moving in...

#125152

Posted by unregistered user at 5/5/08 10:53 a.m.

They are definately going to buy Earth Class Mail, a member of their accellorator program...mostly due to the brilliance of their CEO as seen in the Start Up Junkies. That man can certainly manage.

#125159

Posted by Jason Berg at 5/5/08 11:07 a.m.

Entellium would give Microsoft a decent CRM product rather than the Outlook on steroids approach they've taken to combat locally owned CRM shop Avidian.

If Google and Salesforce.com can make money together, surely Microsoft must respond with something better than Dynamics.

#125234

Posted by unregistered user at 5/5/08 1:21 p.m.

Another candidate from the MS Accelerator program is Experticity. They not only offer a strong play in the collaboration space, but can deliver ads right to the point of decision- where consumers are buying in-store and online. Add to this their ability to capture, record and analyze every consumer transaction and MS scores a triple play.

#125237

Posted by unregistered user at 5/5/08 1:26 p.m.

right, now each one of you small potatoes, put your company name here and suggest microsoft to buy you.
The most pathetic was one suggested here to buy his Earth grounded Mail. Funny guys

#126908

Posted by unregistered user at 5/8/08 11:20 p.m.

To post #125152 - I know that you have got to joking about Earth Class Fail. Ron can't even manage his weight more less people. This will be another company like egov.com that we will be able to watch implode over and over again thanks to the wonderful episodes on MOJO. Hey, but nice try pumping your company.

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PictureForget the ad space altogether. It's time that Microsoft to show the long term vision that created their success in the first place. Clearly there are far more valuable, provocative and lucrative problems for technology to solve than consumer spending and entertainment. It's time for the Blue Monster to think bigger thoughts."

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