razmaspaz

Tim Bray, as he usually does, has a very insightful point about the MS/Yahoo deal. Lets just say for a second that Yahoo has 1billion users. That number is probably high, but lest just say. Microsoft just payed $44.50/user for yahoo. In all likelihood the number is probably closer to 500 million making the cost/user closer to $100. Thats a lot of money. Here’s why.

For this to be profitable for Microsoft, you, me, and every other user of Yahoo has to generate yearly incremental profit of roughly $5-7. That means that you have to click on ads, buy software, or otherwise do something that makes MS $20-50, and you have to do it every year until you die. That doesn’t seem so hard, except…

I’m what I would consider an avid internet user. I spend more time than most on the internet, doing work, borwsing, shopping, whatever. Thing is, I don’t use Yahoo for much. In fact that only thing my Yahoo ID ever does is log me into Flickr ( a service that is now almost certain to be ruined). I don’t buy photos on Flickr, so I generate no revenue for Yahoo or MS. There might be some possibility of a synergy between MS and Yahoo that would propel me to buy Vista (read auto export of images to Flickr from MS Photo Viewer) or something, but the truth is, I’m trying to get as far away from the windows world as possible, so the likelihood of me buying any new MS products because of something Yahoo does is near zilch.

We’ll have to wait and see if this pans out, but I can tell you for sure that I wasn’t worth the $44.50, were you?