Microsoft to Wall Street: 'We've Moved On'
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Sounding more than a little like a jilted lover, a Microsoft executive speaking to financial professionals Tuesday played down the failure of the company's three-month long bid for Yahoo.
"We've moved on," Brian Hall, general manager of the Windows Live business group, told an audience at the Merrill Lynch Technology Conference in New York.
It was a phrase he repeated several times during his presentation, and again during the question-and-answer session that followed it.
Microsoft's (NASDAQ: MSFT) three-month pursuit of Yahoo (NASDAQ: YHOO) ended Saturday when the company decided the search vendor was overpriced.
Hall conceded that there would have been benefits to Microsoft if the deal had gone through. But he echoed CEO Steve Ballmer's statements that Microsoft will not be held back from aggressively moving forward in the search arena.
"Yahoo would have been an accelerator ... it has a strong position in e-mail on a worldwide basis and in instant messaging in the U.S.," Hall said. "But we've withdrawn the offer and now we're focused on 'How do we grow as fast as possible organically?'"
He also said that Ballmer made the right decision to drop the takeover attempt rather than continue upping the offer.
"In the discussions with Yahoo, we put forth a very compelling offer, [but] the stars didn't align," Hall said.
Asked his perspective on Time Warner's AOL property -- now undergoing a major overhaul -- Hall said he couldn't address whether it would make a good buy for Microsoft, but he offered some perspective on Microsoft's stance.
"AOL has a strong position in the U.S. with e-mail, portal, and instant messaging ... [with] AIM and ICQ ... and a strong position in Germany and Russia," he said. On the minus side of the equation, he said AOL doesn't have an ad platform -- seemingly in defiance of AOL's efforts with Platform A -- and it has been outsourcing its search advertising to Google (NASDAQ: GOOG).
"They're not gaining share, for sure," Hall added.
One longtime Microsoft observer said afterward that he hopes to see the company move quickly to refocus, now that the drama of the failed takeover is mostly over.
"I wasn't a big fan of the deal in the first place," Rob Enderle, principal analyst at the Enderle Group, told InternetNews.com.
The deal certainly had a fair share of obstacles ahead of it. Mergers are difficult to execute well, and has never completed one of the size proposed in the Yahoo bid -- some $47 billion or so.
Besides that, any merger can be a distraction for a company's senior executives, causing them to lose focus on the business overall.
"Mergers become all-consuming so it's probably better if they stay closer to their knitting," Enderle added.
Right now, for example, he said, Windows needs Microsoft's attention. Despite what Microsoft describes as strong sales -- at least 140 million units so far -- Enderle criticized the company for not promoting it more strongly.
"Vista is massively under-marketed," he said.
After all, it's one of the company's main cash cows. Yet, he said, the company has done little publicly to counter criticisms of Vista to date.
"At the end of the day, perception is 100 percent of reality," Enderle added.