Entries tagged with “yahoo” from Paul Lopez Unwired

The Apache Hadoop Core is an open source platform enabling developers to write and run applications across clusters of commodity computers and process vast amounts of data. As a primary investor and developer of Hadoop, today Yahoo released their own tested distribution of the code that powers their search engines, ad systems and webmail services. There is a growing move toward design patterns that leverage the parallelism inherent in distributed systems such as Hadoop and Google's MapReduce. Applications can be developed on single servers then deployed on massively distributed cloud infrastructure without knowing the details of such distribution. Once these applications are deployed they can act as their own service provider to other systems. Indeed we see that scenario with Amazon's EC2 (with native Hadoop support), IBM's Blue Cloud Initiative and Google today. This type of database is not a relational engine like Oracle or SQL Server. Hadoop enables large scale data mining for useful applications such as fraud detection and rich media indexing. I think this release is significant because it allows developers to take advantage of all the work put in to improve Hadoop over the years. Yahoo's change log file has over 8,400 lines and contains a wealth of knowledge gained by real production experience. Can Yahoo gain cloud credibility by giving it away? I think so; it gives everyone a living benchmark.

Carol Bartz led Autodesk for 14 years and has close ties with Jerry Yang and Susan Decker (the current Yahoo President). The Wall Street Journal has confirmed she's accepted an offer to become the new CEO of Yahoo! Autodesk is considered a legacy software company and one that really had nothing to do with the Internet era or Web 2.0. Some industry observers and bloggers are already pointing out she knows nothing about the web, she won't last long and her photo is a glamour shot to hide her 60 year age. Oh well, so what, no one complained about Greta Van Susteren. I think they are all missing the point.  As I've stated here before, Yahoo needs to package itself up for sale and Autodesk is no stranger to M&A. Under Carol's watch, they completed 19 acquisitions between 1997 and 2005.  I see this management change opening up discussions with Microsoft. I think she brings the toughness Yahoo needs right now. At minimum the company will most likely be broken apart as they try to seek value and extract the growth engines that are left.

Jellyfish, an online shopping cash-back service purchased by Microsoft last year forms the foundation of a new search engine advertising model the company is expected to announce at its Advance08 conference this week. The new MS LIVE platform, called "Live Search Cashback," will enable allow users to get cash back from purchases made by participating advertisers on a variety of merchandise. In contrast to Google's virtual monopoly on the pay-per-click model, Microsoft will share part of the fee collected from the advertisers to incent users to move forward with a purchase. Conceptually, this is no different than a manufacturer offering rebates at the retail point-of-sale level through the channel and to the end customer. Microsoft takes the risk of running the ad by changing the model to CPA (cost-per-action) from CPC (cost-per-click, aka PPC, pay-per-click). Microsoft's recent re-engagement with Yahoo, specifically its search business, potentially provides advertisers enough inventory to make this a viable service. Maybe these "stimulus checks" from Microsoft will keep our economy going this year!

Carl Ichan is moving ahead with a Yahoo proxy battle and a new slate of 10 board seats including Mark Cuban.  He's shaken up things at Motorola and Time Warner so he's not the person you'd want to come knocking at your investor relations door. He picked up 50 million shares last week and has said he will buy up more shares ($ billion + shareholder already). All he needs to Gordon Crawford (with Capital Research & Management) and Bill Miller with Legg Mason who owns 80 million Yahoo shares and is the company's second largest shareholder to pull this off. He does not have Microsoft's commitment, but with a new board and willingness to accept the last offer, the deal may go through. Yang will have trouble blocking the Power Play shots on goal as Ballmer, Ichan and Cuban crash the net and head for the onion bag.

Back in February I warned to stay out of technology stocks for a while. Last week we saw the unwinding of the commodities trade and the rotation move into tech and financials. The four horsemen have traditionally been referred to as Apple (AAPL), Google (GOOG), Research in Motion (RIMM) and Amazon (AMZN). I personally think we can replace Amazon for another strong big-cap tech name. While I'm not wandering into financials at the moment, I still like Goldman Sachs (GS) and have enjoyed the run-up in Visa (V) and MasterCard (MA). The Nasdaq has found nice support above 2400 and the S&P has closed consistently over 1400. At this stage, I'm calling the bottom here but expect to see more volatility in retail, financial and energy sectors. We were thinking last week the Agricultural (Potash POT, Monsanto MON and others) were done but not quite so fast. The world still needs food and as long as we burn corn for ethanol, this sector still looks good. Don't forget to mix in some Natural Gas plays and the oil drillers (CHK, XTO, APA). Good Cisco earnings would signal the official "all-clear" and tech should do fine into the summer months. Watch for resistance at 2550 for the Nasdaq and a bump on the S&P around 1440. Next stop will be 1500 (along with Google over 630 and Apple over 200).

Meanwhile, Microsoft made the right call walking away from Yahoo. The Yahoo shareholders are going to be coming out in full force like the animals who through Horton in a cage in "Horton hears a Who." Maybe Jerry Yang's heard something no one else has but Ballmer glibly said, "Talk to the hand" this weekend. Ballmer's public letter should make it open season for the Yahoo shareholders to either unseat the board or get them to back to the emerald city. Meanwhile, the Yahoo employees must be thinking "Hoo will save us?"

In a deal with Yahoo, Jajah will be providing its payment processing, telephony infrastructure and customer care to Yahoo Messenger users who want to receive and make calls to the PSTN. The $28M startup from Mountain View reportedly has 10 million users of its VOIP since its inception in 2005. This kind of reminds me of the billions eBay wrote off with Skype. Google added its new Chatback widget that allows you to put a button on your website and when you are seen available, random people can start IM'ing you (for some people, this can be annoying). Google recently bought GrandCentral that allows "one phone number for all your phones." We can see the convergence of single number reachability over the web and for public VOIP services. Business users can receive calls, text or instant messages over the network straight to their device of choice. Gtalk and Gmail have certainly reached some critical mass with recent moves from universities and enterprises seeking to outsource their email to Google and bypassing Exchange or Notes altogether. Google will need some serious enterprise business development and support to attract major companies to its SaaS platforms. The value proposition and cost models are attractive but still some companies are uncomfortable about outsourcing some as mission critical as their voice service. Google blew away comScore and their forecast with their recent earnings and shot up 83 points after hours. We might be close to "off-to-the-races" with tech soon. Tech is usually better into the summer months so stay tuned. Apple and RIM did not disappoint either. Buy the dips and sell the rips! At least until we are solidly above 1500 on the S&P.

Yahoo plans to reject Microsoft's offer of $31 per share for the company according to developments over the weekend. Yahoo is seeking something closer to $40/share. Looks like Jerry Yang is going to man-up and take on Steve Ballmer. Even though Steve is a newbie to big takeovers, my money is on Mr. Softee getting this deal done. Yahoo does not have a staggered board meaning that all of its directors are up for re-election at once. They also do not have preferred shares or any other class of supervoting securities to protect them from hostile takeovers.  March 13^th is the last day to nominate competing directors at Yahoo. According to Yahoo's by-laws, it is easy to push directors out if they do not get majority shareholder approval. The problem is if Microsoft mounted a proxy fight, that provision doesn't apply because Microsoft will provide more nominees than available director seats. The Wall Street Journal suggests that Yahoo may be betting that Microsoft does not want to go "hostile" since it may cause deep resentment among the rank-and-file engineers it still needs to continue the company's success. I don't see any other option for Yahoo at this point, either way some of the yahoos are going to have to start cleaning out the desks.

Yahoo cannot survive on its own. Microsoft needs a search technology boost. The companies have been talking for over a year. Last February, the deal could have been $60 billion vs. $41 billion on Friday.  Yang is calling in the big guns by reaching out to Google to see if they can "work together." Google could try to cloud this deal by crying anti-trust foul. Ballmer today in their analyst call said that Microsoft acquiring Yahoo would do more for competition than some arrangement with Google & Yahoo. This makes sense for Microsoft and I would expect this to go through this year. Microsoft could use this as a platform for MS Live, think getting more business eyeballs using Microsoft software as a service technology. Yahoo has some good relationships from a content provider to major carriers and is a top destination site - much more than MSN.  It would be important to get the Yahoo software team on board because many new graduates choose to work for a Google or eBay rather than a mainline software company such as Microsoft. This could add some pizzazz to Microsoft's offerings. The only problem I see is that Microsoft will most likely drop the brand altogether within 2 years.

Yahoo announced yesterday it is acquiring Zimbra for $350 million, some industry observers think Zoho may be next. We have seen an uptick in the drive toward integrated collaboration applications among the big players either organically or through acquisitions. Zimbra supports MS Exchange and Apple Mail clients and servers. They also have mail support for Blackberry and Windows Mobile. Google Gmail already has many of the features that make Zimbra interesting for Yahoo. For example, Gmail can enable users to retrieve package tracking data; all using AJAX popups and rich-client UI's sans postbacks. Many Web 2.0 features already present in Google, for example Maps, have just appeared in Yahoo platforms. Even Apple is gearing up iWork 2008 for the enterprise, I have seen an increase in Apple within the enterprise lately. IBM announced today they will offer free open-source programs for word processing, spreadsheets and presentations based on Symphony and OpenOffice.org.  All of these applications are geared toward sharing and collaboration. Using standards such as XML, and direct-drive publishing to social networking sites using web services provides formidable competition to Microsoft Office 2007. Microsoft notes (no pun intended for Lotus Notes!) they have 500 million users of Office worldwide. Last count, Zimbra had about 6 million paid mailboxes. There is still a big market and most users have more than one email client in use. Microsoft has not been successful in establishing Office Open XML as a standard with the International Organization for Standards (Geneva). IBM, Google and Sun support the OpenDocument format based also on XML and has been approved as an international standard. Use of AJAX and even VOIP is nothing new here but Zimbra has done a good job briefing key analysts and showing how their applications are used in a corporate setting. They have a good customer base and group of loyal users, especially in higher education. Their offline tools and mashups are particularly useful in a corporate environment for distributed teams. Yahoo in most people's minds is still focused on the consumer and this makes sense for home and personal use.

The financial backing of Yahoo should help Zimbra drive further into commercial environments. Most enterprises have their own well-established email, contacts and calendaring infrastructure. Now IT has to contend with business users demanding richer collaboration tools with better web user interfaces and performance. Interoperability among email platforms is becoming more essential to widespread adoption of newer web-based, client-side enhanced applications such as Zimbra. Document conversion is not completely error prone either which forces some level of standardization among major enterprises.