Calacanis and Rushkoff Agree

By Douglas Rushkoff. Published in The Daily Beast on 29 July 2009

Microsoft and Yahoo are teaming up protect their brands and their shareholders against the unstoppable force that is Google. In doing so, both companies are demonstrating a willingness to change what they are on the most fundamental level, in order to survive. Yahoo search will now be licensed to Microsoft’s Bing. Microsoft gets access to Yahoo’s search community, and Yahoo gets to focus on display ads and its still-popular content, finance and social sites. So why are Yahoo’s shares down 11% as of mid-afternoon Wednesday, and Microsoft’s up a bit?

Because while Microsoft is actually getting something it needs, Yahoo is merely hooking up with the most alpha male company it can still find in order to survive. Microsoft will soon turn Yahoo into its prison bitch, and this won’t be pretty.

Jason Calacanis, on, on the Yahoo-Microsoft deal:

The once proud warrior of the internet space laid down its sword, knelt at the feet of Microsoft and gutted itself today. There was no honor in this death, it was one brought by the shame of losing to Google and a lack of faith in one’s ability to compete in the space they created. To be clear, Yahoo didn’t need to do this deal, Microsoft did. Ultimately Yahoo will look back at this moment as the second–and perhaps fatal–mistake in their epic history.