Yahoo says it is not going down without a fight

As I had previously observed, price does matter to Yahoo!. According to the Wall Street Journal, the Yahoo Board has rejected Microsoft's bid. The article also notes that Yahoo has adopted poison pill provisions to prevent an unwanted takeover. Anyone who thought this was a done deal now has plenty of time to reconsider their position.

IBM: the Internet really should be a mainframe (NOT)

Nicholas Carr notes that IBM Research has published a paper hypothesizing we should collapse the entire Internet ecosystem into one big computer. Why? Because such a computer could be dramatically cheaper to create and operate than today's commodity clusters.

At present, almost all of the companies operating at web-scale are using clusters of commodity computers, an approach that we postulate is akin to building a power plant from a collection of portable generators. That is, commodity computers were never designed to be efficient at scale, so while each server seems like a low-price part in isolation, the cluster in aggregate is expensive to purchase, power and cool in addition to being failure-prone. Despite the inexpensive network interface cards in commodity computers, the cost to network them does not scale linearly with the number of computers. The switching infrastructure required to support large clusters of computers is not a commodity component, and the cost of high-end switches does not scale linearly with the number of ports. Because of the power and cooling properties of commodity computers many datacenter operators must leave significant floor space unused to fit within the datacenter power budget, which then requires the significant investment of building additional datacenters.

It's a terrifically thought-provoking vision. But its a vision we've heard from IBM in other contexts, when it pushed running Linux on Z-series mainframes as being more economical than buying its own Intel X-series servers. And last time I checked, IBM's X series servers were still selling just fine. Ultimately, customers, not research papers, will really determine the types of servers we use on tomorrow's Internet. But the factors that this paper leaves out are the very real and human issues of control, governance, and freedom. Yes, we need big iron clusters and servers to deliver services to consumers Anywhere. But we'll only see innovative Anywhere services emerge if the companies owning the the big iron doesn't have veto power over entrepreneurs wanting to build those services. And regardless of the economic benefits of a mainframe Internet, tomorrows Anywhere networks will need innovative services more than lower bandwidth and CPU costs.

The Microsoft-Yahoo deal: price matters Anywhere

MSFTextrememakeover has a nice financial analysis of the Microsoft-Yahoo deal suggesting that this hostile takeover bid is more ego than rational investment. Read the full analysis, but I think the conclusion is right on.

[From MSFTextrememakeover: Having Fun Yet?]

...there is no way that YHOO on paper is going to be worth this price. So at some future point, MSFT is going to have to take a huge charge to write down the "goodwill" difference between what they paid, versus what YHOO was actually worth. I guesstimate that that charge will be at least $1/share, and it could easily be $2 or more depending on what the final price is, how the integration goes, etc.. Needless to say, a $1-2 charge in some future fiscal will have the effect of wiping out a large part of MSFT's overall earnings for that entire year.

As I said in the last post, if you're a MSFT shareholder you should be hoping this deal gets kiboshed by either YHOO or regulators (however unlikely). Alternatively, you should hope that MSFT and YHOO come to some other accommodation. The best option there would be a standalone entity (either under the YHOO listing or a new one), into which both YHOO and MSFT contribute and MSFT shareholders get stock.

Putting on my Anywhere hat, I can understand Microsoft's need to buy a credible mobile content creator to be relevant to Anywhere consumers. But Microsoft's claiming that this deal makes sense is a bit like saying that I need to buy a $313,000 Lamborghini Murciélago to commute to work. I can understand the need, but the price really is over the top.

Nüvifone: Garmin's products are not just for navigation any more

I've been meaning to write for a while now about Garmin's new iPhone competitor, the nuvifone. Gizmodo reminded me about that today by posting the above Garmin marketing video.

The video tries to show how hip and cool is could be to combine navigation and communication in one device without the panache of the iPhone commercials. As concept ads go, it's really not bad. While they try to hit far too many points in a single video (tip to Garmin: next time try making a single point in each video. See the iPhone ads for examples), Garmin is actually emphasizing user benefits instead of just features in their marketing. Garmin gets it; consumers have to be excited about the device for it to succeed.

But I find myself agreeing with John Gruber who noted the sniff of vapor in Garmin's Web marketing materials. The screen shots in the nuviphone media gallery sport far more PhotoShop skill than anything real, since I find it unlikely the nuviphone is going to sport a 793x1400 pixel screen. And unlike the iPhone, no one has actually seen one of these devices in operation. I'm hoping some of my colleagues will see one at 3GSM in Barcelona next week, but I'm willing to bet Garmin will be showing mockups instead of operating phones behind glass as Apple did at its January 2007 launch.

But all that said, I have to agree with one of the commenters on Gizmodo: isn't it interesting that significant mobile device innovation is coming from manufacturers who aren't traditional cell phone makers?

Anywhere consumers comment on the US primary elections by mashup

Google has an amazingly cool mashup that geographically maps consumer Twitter comments on the US elections in real time. They also promise to present real-time election results tonight when the polls close. My biggest surprise watching this mashup was how many comments on the election are coming from other countries like Australia and France. People outside the US are quite interested in our primary results, but those voices get lost through the filter of the conventional media networks. Tools like this make them heard. When I was a kid, TV networks used computers to aggregate election results and predict winners. Now, we use computers to disaggregate results and to give individuals voices that can be seen all over the world. Technology marches on.