Is it just me or does it seem like Microsoft is making all the right decisions when it comes to the takeover bids as of late? Yesterday the news that they finally gave up on Yahoo! came out, which in my humble opinion is a positive outcome for Microsoft and its users/customers. I know primary interest in the Yahoo! deal was the advertising potential, but when you’re trying to “hire” an unreasonable tamper tantrum its usually better to walk away. But this post is about a little more than that.

Last week Microsoft also laid down the reality to Xobni, and basically told them that they will be swallowed up by the Outlook team and relegated to the 1.5 useful features their product delivers. They didn’t seem to like that and instead walked away from the deal to release the beta today.

It’s not that Xobni is not cool, it’s just that its not 7Mb cool. It’s just that its premise and promise fail under load in much the same way that Microsoft Outlook, Google Desktop and all the others fail when dealing with massive amounts of data. Xobni features, in no particular order, are Inbox search, ripping out contact phone numbers from email signatures, attachment tracking between contacts and the supposed social networking aspect - it takes all the people you’ve ever CC’ed together and assumes they are a social network. No, not kidding. Aside from the visual interface tricks any third grader would enjoy, the most worthwhile component to me appeared to be the attachment tracking, however, the field was not wide enough to quickly see the entire filename. I frequently have to track contracts and documents in external email threads so this would have been useful had it been designed with some common WPF components that make up the actual user experience. So even though I’ve maintained this to be a rather cool but useless addon, with the public beta release I am uninstalling it. Why? Because the 2 features I need should be a part of Outlook, not yet another bloated addin that will fail to deliver when it loads up all my data.

The reality

The Web 2.0 vapor train is coming to an end it seems and Microsoft, with its gigantic weiner, seems to be pissing them all out of their VC-induced REM sleep state.

All the Web 2.0, like .com before it, is sustained and built not on profits but hopes of profits. Smart people cash out and don’t buy into the greater fool theory, but some people like the taste of their dreams so much that they may never wake up and face the reality - in Xobni’s case, thats the fact that $20 million for 2 Outlook features is a hell of a compliment. For Yahoo!, it’s the fact that sometimes you have to work with people you don’t like because you have a common agenda, especially when there is a 500lb gorilla in the room aiming to crush you.

But companies grow up, they wake up, they learn. Moral of the story being, dreaming of money is nice, having money in the bank is even nicer.

As for Ballmer, there is speculation that he may be asked to step down. If anything, he deserves a raise for being up front. Microsoft has a long reputation of being an evin, ruthless, throwing chairs behind the closed door, strongarming company. The recent press releases show a far more open, process-oriented CEO than the videos and keynotes portray.

Now… how about some of that $33/share being invested back into the company for rapid development of features tied to the actual products people pay for and run their companies with?

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