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Microsoft + Yahoo!: A sign that Microsoft's best days are past

Microsoft wouldn't be seeking to acquire Yahoo! if it still had its own future to write.

The New York Times hits the nail right on the head: If Microsoft were at the top of its game (as its numbers suggest), it wouldn't need to acquire Yahoo!:

...[Iif its proposed acquisition of Yahoo signals anything, it serves as a confirmation that Microsoft's glory days are in the past. Having failed to challenge Google where it matters most -- in online advertising -- it has been reduced to bulking up by buying Google's nearest but still distant competitor. In many ways, the company has become exactly what Bill Gates used to fear the most -- sluggish, bureaucratic, slow to respond to new forms of competition -- just as I.B.M. was when Microsoft convinced that era's tech behemoth to use Microsoft's operating system in its new personal computer.

of course, just as with IBM, becoming "sluggish, bureaucratic, [and] slow" is not to say that Microsoft is going out of business any time soon. Rather, it's just to say that Microsoft's glory days of market innovations are well past it (not that anyone was doubting this - when is the last time it really did anything innovative?).

But Microsoft can't be happy about failing miserably to compete in the 21st Century, as the Guardian notes, choosing instead to preserve its 20th-century gains:

Microsoft's bid for Yahoo is a public confession of failure: an admission that despite the company's resources Microsoft has failed to build up an effective presence on its own in key areas such as search, web advertising and services that Google has been so spectacularly successful at. Instead it is trying to buy its way into the 21st century. Microsoft has proved very successful at preserving its 90% plus monopoly of operating systems, spreadsheets and word processing but is much less successful where it faces stiff competition.

Microsoft will likely start to offer a pension plan and start paying dividends. (Oh, wait. It already does. The "revolution" is well underway....)

Which is why I've never believed we needed government regulation to beat Microsoft. We just need the market. The market created open source and Google. Governments didn't. The dollar (or, more likely, Euro :-) will find a way to compete. In the case of Microsoft, it has and will continue to do so, much to Microsoft's detriment.

Microsoft won't go away. But it won't be king of the hill anymore. It will just be king of the 20th Century.