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Earth to Yahoo! What Do Yahoo! Employees Think of the Micro-hoo Deal?

February 2, 2008

The silence in Sunnyvale is deafening. What do Yahoo! employees think of joining forces with Microsoft? My colleague Rob Hof wrote an excellent narrative detailing the fall of this American icon, and he quotes one employee dissing former ceo Terry Semel’s attempts to turn Yahoo! into a Hollywood-type media company. But I have heard little to nothing out of Yahoo! about the deal. I imagine the company is still reeling from this cold cock punch.

The thoughts and feelings of Yahoo! employees may be the single most important factor in making this deal a success–and that’s what worries me. Microsoft execs rightly argue that the one of the chief premises of this deal is that by combining the engineering forces of the two companies, they will be able to compete better against Google.

But what if those employees don’t want to work for Microsoft? One Silicon Valley software exec I spoke to on Friday said if he was a Yahoo! staffer he would never want to work for Microsoft. “A guy I know who helped found Yahoo! is probably crying right now,” said the exec.

One thing right coasters don’t fully appreciate about the tech industry are the historical and ongoing tensions between Microsoft and Silicon Valley. For many years, Microsoft was viewed as the Evil Empire. Why? Because the folks up in Redmond were seen as an impediment to innovation, as an obstacle to making money.

Microsoft’s power over the tech indusry was so great that throughout much of the 1980s and 1990s, Silicon Valley venture capitalists would never invest in a market that Microsoft was in, or even thinking of entering. The anti-trust case changed all that, tying up Microsoft’s hands. And then Bill Gates & Co. just got overrun by new waves of technology, i.e. the Internet.

Now, Microsoft’s hostile offer for one of the Valley’s superstars reawakens those primordial fears. We all know that many of Yahoo! brightest minds have already walked out the door over the last few years as the company stumbled. But I bet that if this deal goes through, you will see a massive stampede for the exits. Smart engineers would probably rather take equity in a startup (or work for Google) than punch the clock for Microsoft.

So Yahoo!, what do you have to say? Would you stay or go and why?

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