Let's see...Microsoft, an aging though powerful tech and would-be Internet giant, offered to buy Yahoo, an aging and increasingly weak former Internet giant, in a $44.6 billion buyout bid. Yahoo refused to bite and now the offer has turned hostile.
Desperate to avoid the Redmond giant's jaws, or at least desperate to force Microsoft to up its offer, Yahoo is finagling an advertising pact with mighty search giant Google. At the same time, Yahoo and AOL are rumored to be close to a deal that would merge the two companies' Internet operations.
Hoping to counterbalance Yahoo's possibly poisonous alliance with Google or AOL (or both), Microsoft is exploring a joint bid for Yahoo with Murdoch's News Corp. Have you ever seen a more ridiculous spectacle? Over Yahoo, no less.
This MSFT/YHOO/AOL/NWS/etc. scrum (borrowing the acronym string from Paul Kedrosky) is by now surely far disconnected from any rational business goal and has devolved into a high-stakes game where egos, investment banking fees and pure corporate sportsmanship are the primary prizes. It's the Internet industry's sporting event of the year.
Except the prize is...Yahoo, which, to me, is a boring-as-dirt Internet has-been. The business press reports the goings-on as if something really huge is at stake. Here's a sample from the WSJ:
A joint deal by Microsoft and News Corp. to acquire Yahoo would create a huge one-stop shop for online advertisers and bring together some of the largest players in social networking, online news and email.
I remember reading something similar about one-stop shops about six or seven years ago. Oh yeah, AOL-Time Warner was supposed to meld the old and new media, creating a one-stop shop for web, print and TV advertisers.
As the WSJ article notes, a "three-way combination would also increase the complexity of any post-deal integration in areas such as combining computer systems, streamlining management and sorting out brand strategy." Yup, that's what sunk AOL-Time Warner. They couldn't getting everybody to play nicely together and just integrate so that the synergies could flow.
Is it any more reasonable to think MSFT/YHOO/AOL/NWS/etc would do any better? At least at the time of their merger, AOL and Time Warner were independently strong companies. Yahoo will release its earnings soon and everybody expects that the ailing company's prognosis as a stand-alone business will darken even further.
That's not, however, going to stop MSFT/YHOO/AOL/NWS/etc from all the jostling, positioning and deal-making effort. It's probably way too much fun at this point for the principals involved to walk off the field. The most humiliating thing would be for MSFT/YHOO/AOL/NWS/etc to simply give up.
Some deal or the other is going to get cut. My guess is that whatever the deal is, it will look pretty ridiculous five years from now.
Posted by Cynthia Brumfield at 11:40 PM | Print | Comments (0)For those of you who haven't been following a primarily UK-based controversy, digital technology company Phorm sells a system to ISPs that tracks user Internet activity in order to provider better "behavioral targeting" data for advertising purposes. Although Phorm's purported history as a spyware provider and its recent sketchy Wikipedia editing behavior have drummed up controversy for the company, it earned a bad rap when it was disclosed last year that big ISPs BT, Virgin Media and TalkTalk were testing Phorm's system without clearly notifying customers of this fact, an obvious privacy concern that Phorm tells the NYT's Saul Hansell will be remedied by an "unavoidable notice" pop-up screen that users can't ignore.
Phorm, formally 121Media, comes with a little bit of baggage. First, the company is rumored to have once been a spyware purveyor, although Phorm argues that its spyware was really adware (note: a lot of web encyclopedias define adware as spyware.)
Then earlier this month Phorm got caught in an embarassing attempt to edit its Wikipedia profile by deleting key factual and unpleasant facts about the company. Phorm executives admitted to being "overzealous" in the Wikipedia edits and promised to never do it again.
Still, Phorm looks better than NebuAd, its main rival. NebuAd, which has contracts with U.S. ISPs Embarq and WideOpenWest, doesn't go as far as the opt-out pop-up notification. ISPs that use NebuAd can send emails, bill inserts or include boilerplate language in their user or privacy policy statements -- any one or all of these methods are almost virtually guaranteed to be ineffective.
Opting-out is far from an ideal solution, even ignoring the notion that opt-in methods are preferred by privacy advocates. According to a technical white paper by Cambridge University researcher Richard Clayton, opting out of Phorm's system might increase latency or reduce robustness of the user's Internet activity. (The "GET" requests are redirected three times for opt-out users, or something to that effect.)
Although I've always been less worried than most about private sector privacy violations (as opposed to law enforcement privacy violations), operating under the belief that few companies are smart enought to do bad things with the overwhelming snarl of data they receive, lately I've received some eerily targeted ads and feeds that are clearly based on things about myself that I consider private (mostly investment-related stuff...sorry, nothing really good.) Although Phorm might very well be an upstanding outfit, I'd feel a lot better if the company that is tracking all my Internet activity were far beyond anyone's moral reproach.
Posted by Cynthia Brumfield at 7:45 PM | Print | Comments (0)
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