What i think about the Microsoft and Yahoo Search Agreement

I have no idea of what type of discussions have happened between Microsoft and Yahoo! in the past two years, but as things stand right now, I feel like Microsoft had a strategy all along and it just worked.

1- Try to buy the company, leak a high price, but make your real offer substantially lower so you create a revolt among employees and shareholders. Who's going to believe the CEO when all the press, who always knows better, is claiming higher numbers?

2- Get the lobbying working so you prevent any other deal, especially between Yahoo! and Google.

3- Come back a few months later with an offer to buy a division of the company (search), even if you don't really mean it. Make sure the offer is way too low again, in order to put things back in perspective with your previous offer, and put even more pressure on management.

4- Launch your own service, competing with Yahoo! search. Call it Bing. Spend millions of dollars to make sure that reviews, buzz are all creating momentum for your service and at the same time, spend even more to take away users from Yahoo! so they start feeling the threat. Suddenly people think you have a play in this game and Yahoo! feels they could lose market share.

5- Come back to Yahoo!, who can't afford to spend as much as you or Google, and give them the choice to join your Bing adventure or become a tiny player in this huge market. Offer them a revenue share deal. They accept it.

Microsoft started with being ready to spend more than $25B to buy Yahoo!, and ended up getting a revenue share deal to own one of the most interesting part of the Yahoo! business. In a way, it's going to make Yahoo!'s life easier as they're going to continue to be independent, and they're now going to be able to focus on media and display advertising, but I can't prevent myself from thinking that this whole thing has been orchestrated very well by Microsoft. And they were ready to sacrifice whomever came in your way, like Jerry Yang.