Microsoft, Yahoo, and Web Workers

Surely you’ve seen the news by now: Microsoft has called off its attempt to buy Yahoo!. While there’s plenty of analysis flying around the blogosphere, there’s room for a quick look at the non-deal from the web worker perspective.

In most ways, we’re back to the world as it was before Steve Ballmer dropped the original $44 billion bombshell. Web workers don’t have to agonize over whether to quit using our accounts at Yahoo-owned services in protest over the Microsoft takeover; we don’t have to worry about things like del.icio.us and Flickr being kicked to the curb by new corporate overlords. Yahoo!’s stock will take a big hit tomorrow, but most of us don’t have our nest eggs staked on the stock market, and if you think back that far, it’s stock wasn’t in any great shape before all this drama played out.
In other ways, the reverberations of the past several months will be with us for a long time. The proposed deal focused additional attention on Google’s dominance of the search advertising market, and its failure removes the chance that Microsoft and Yahoo could gang up to make that market more competitive. If Google stumbles in its advertising plans, there’s probably no one else to keep pumping that money into the web economy. And there will undoubtedly be employees at both companies who are not happy with the way the whole thing played out, meaning increased competition in core web worker job markets as people decide to move on rather than stay a part of one behemoth or the other.

No doubt we will also see both companies in the news with more maneuvering in fairly short order. Microsoft has a huge bucket of cash to try some other game-changing move with; Yahoo management has to try to prove to stockholders that torpedoing the deal wasn’t a huge mistake. With luck we’ll see some real innovation come out of one or both camps as they attempt to show us that they’re not broken by one failed deal.

And as our parent weblog GigaOm points out, just because this offer has been withdrawn doesn’t mean we’ve heard the last of a proposed merger. So while the drama is over for now, it just might come back in a year.