Pity the remaining inhabitants of Yahoo! On August 1, when its board of directors meets to decide whether to throw out CEO and co-founder Jerry Yang and capitulate to Microsoft, the Siege of Yahoo will have entered, to the day, its sixth month.
Yahoo? Is that thing still going on? Go ahead and scream. That's the point of a siege, isn't it? The unbearable tedium mixed with the horror of what might unfold is precisely what the invading army inflicts. We think of a siege as an active event, of trebuchets pitching 700-lb. boulders and plague-infested goat carcasses into a walled city. But the word is derived from the Latin sedere, which means "to sit." And that's precisely what Microsoft has been doing: sitting on Yahoo. By siege standards, six months is nothing. The Mongol siege of Xiangyang, in southern China and led by Kublai Khan, lasted six years.
The Mongols were the sultans of siege. They'd take their time. Surround a city. Build belching, black-smoke bonfires and roast horses for dinner. Pound drums day and night and force their enemies to dream of death. Soon they'd erect a white tent a signal to surrender now and be spared. Next, they'd pitch a red tent. That meant only the men inside the village would be slaughtered. If the gates still remained closed, up came the black tent the slaughter of everyone. By this time, the people under siege were sick with fear, starved and cut off from their neighbors. See how it works?
Steve Ballmer isn't going to be confused with a patient man like Kublai Khan. Ballmer launched The Siege of Yahoo on February 1 by throwing a brick through Yahoo's window with a shouted demand: Sell now! At $31 a share! Microsoft was pitching the black tent on day one.
It's true that Microsoft and Yahoo had, for the past three years, discussed a "friendly" merger. But that was only to negotiate the terms of surrender. Microsoft had already determined that it must stop Google at all costs, and that Yahoo was the key. Microsoft's operating system monopoly was once a mighty platform that made the company and its partners rich as kings. It made Bill Gates even richer. Then the platform shifted to the Web, owned by no one, but benefiting Google and its magic search engine above all others. Search, after all, is a key to advertising, which, so far, is the only way to make money in the media economy of the Net. And so, to thrive in the future, Microsoft decided to conquer Yahoo now. No other takeover would do not AOL (a dying city with no search) and not Facebook or MySpace (the path to revenue in these growing cities isn't yet clear).
But Yahoo resisted Microsoft's tender. So Ballmer went straight for the black tent. Why pretend that anyone would be spared?
And now we watch the protracted spectacle of a company under siege, with its daily skirmishes and who's up/who's down scoreboard. Carl Icahn, the perpetual barbarian at the gate, launched a proxy fight. Can he and the shareholders vanquish Yahoo's board, opening the doors to the Microsoft hordes? We'll see August 1.
But consider this. Kublai Khan won the battle of Xiangyang, unified China and started the Yuan Dynasty, which lasted for nearly 100 years. How? In the end, the Mongols invented a new weapon, a catapult that was way more accurate, and five times more powerful, than the old model. The six-year siege ended abruptly within days of the new weapon's appearance.
The lesson is, you need to be more than a barbarian to build an empire. You need great technology.