I haven’t forgotten about you. I’ve just got two jobs, one designing and coding websites twenty hours a week, the other working as a Specialist at the Apple Store at Lenox Square Mall.

And, I’m taking a class this summer.

So if you’re wondering where I am and why I haven’t been writing… It’s not because I don’t want to, I just don’t have the time for it at the moment.

But don’t worry. You’re not forgotten.

May 3, 2008
Mr. Jerry Yang
CEO and Chief Yahoo
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089

Dear Jerry:

After over three months, we have reached the conclusion of the process regarding a possible combination of Microsoft and Yahoo!.

We finally got your message. You know how it is. Voicemail of the brain gets backed up, you have to think about each thought one at a time—takes a while when you’re stupid. Guess my brain needs visual thought-mail! LOL!

I first want to convey my personal thanks to you, your management team, and Yahoo!’s Board of Directors for your consideration of our proposal. I appreciate the time and attention all of you have given to this matter, and I especially appreciate the time that you have invested personally. I feel that our discussions this week have been particularly useful, providing me for the first time with real clarity on what is and is not possible.

When we were chatting over Windows Live Messenger/Yahoo Messenger the other day and you dropped the “professional” talk and told me to “please, fuck off, Steve”, I think I finally got it then. Still don’t see why you weren’t geeked out over the WLM/YM interoperation though. That’s just too cool!

I am disappointed that Yahoo! has not moved towards accepting our offer. I first called you with our offer on January 31 because I believed that a combination of our two companies would have created real value for our respective shareholders and would have provided consumers, publishers, and advertisers with greater innovation and choice in the marketplace. Our decision to offer a 62 percent premium at that time reflected the strength of these convictions.

Look. I was just, I just wanted to… I was out of ideas, okay? I was in the shower that morning and I was just like, “Buy Yahoo. Buy Yahoo! BUY YAHOO!! Yahhhhhh!”

In our conversations this week, we conveyed our willingness to raise our offer to $33.00 per share, reflecting again our belief in this collective opportunity. This increase would have added approximately another $5 billion of value to your shareholders, compared to the current value of our initial offer. It also would have reflected a premium of over 70 percent compared to the price at which your stock closed on January 31. Yet it has proven insufficient, as your final position insisted on Microsoft paying yet another $5 billion or more, or at least another $4 per share above our $33.00 offer.

You’re kinda like a shitty girlfriend, you know? No matter how much we did to please you, just couldn’t do it. The whole “please fuck off” thing really helped out, though.

Also, after giving this week’s conversations further thought, it is clear to me that it is not sensible for Microsoft to take our offer directly to your shareholders. This approach would necessarily involve a protracted proxy contest and eventually an exchange offer. Our discussions with you have led us to conclude that, in the interim, you would take steps that would make Yahoo! undesirable as an acquisition for Microsoft.

Ibid. Oh, and that threat of giving Microsoft the HIV if the deal went through was kinda funny, but I didn’t find it in good taste, Jerry.

We regard with particular concern your apparent planning to respond to a “hostile” bid by pursuing a new arrangement that would involve or lead to the outsourcing to Google of key paid Internet search terms offered by Yahoo! today. In our view, such an arrangement with the dominant search provider would make an acquisition of Yahoo! undesirable to us for a number of reasons:

Before I go, I’ve gotta tell you why those threats to sleep with The Enemy really freaked us out. Seriously. When I heard about the Google ad deal I literally had to change my underwear and take a tranquilizer.

• First, it would fundamentally undermine Yahoo!’s own strategy and long-term viability by encouraging advertisers to use Google as opposed to your Panama paid search system. This would also fragment your search advertising and display advertising strategies and the ecosystem surrounding them. This would undermine the reliance on your display advertising business to fuel future growth.

C’mon, how dumb do you have to be to sleep with a guy you don’t even like? You made like our offer was a date-rape drug-night gone wrong. Venomous, sure, but nothing I thought would kill you.

• Given this, it would impair Yahoo’s ability to retain the talented engineers working on advertising systems that are important to our interest in a combination of our companies.

That was so uncool. You were betraying your friends just to make me jealous. Know what? You’re not even a shitty girlfriend. You’re like a shitty ex-girlfriend that I never even dated. Don’t ask me how that works, it does, and you proved it.

• In addition, it would raise a host of regulatory and legal problems that no acquirer, including Microsoft, would want to inherit. Among other things, this would consolidate market share with the already-dominant paid search provider in a manner that would reduce competition and choice in the marketplace.

Been there, done that shit.

• This would also effectively enable Google to set the prices for key search terms on both their and your search platforms and, in the process, raise prices charged to advertisers on Yahoo. In addition to whatever resulting legal problems, this seems unwise from a business perspective unless in fact one simply wishes to use this as a vehicle to exit the paid search business in favor of Google.

The Google deal was just really, really unattractive. Before you were all sexy and Yahoo, then it was like, ugh. Talk about going from stiff to limp.

• It could foreclose any chance of a combination with any other search provider that is not already relying on Google’s search services.

Meaning, us and our affiliates.

Accordingly, your apparent plan to pursue such an arrangement in the event of a proxy contest or exchange offer leads me to the firm decision not to pursue such a path. Instead, I hereby formally withdraw Microsoft’s proposal to acquire Yahoo!.

We will move forward and will continue to innovate and grow our business at Microsoft with the talented team we have in place and potentially through strategic transactions with other business partners.

We can’t buy you, but I’m sure if we drive around long enough we’ll find somebody ready and willing.

I still believe even today that our offer remains the only alternative put forward that provides your stockholders full and fair value for their shares. By failing to reach an agreement with us, you and your stockholders have left significant value on the table.

Wouldn’t want to be in your shoes when you explain that to your friends, Jerry.

But clearly a deal is not to be.

Thank you again for the time we have spent together discussing this.

Some things just aren’t meant to be, regardless of the billions of dollars on the table. Sometimes it seems like a good idea to cross a grape with an orange, but that biology shit sometimes doesn’t really make sense because you’d wind up with a thinly-skinned lemon or something.

But, isn’t chatting over WLM/YM just so cool?

Sincerely yours,

Get it? Joke. Hah.

Steven A. Ballmer
Chief Executive Officer
Microsoft Corporation

The original without the commentary.

Our relationships online, and how we connect, protect, manipulate, and store them become much richer and deeper when we consider our devices as part of what we relate to. Live Mesh will know what computers I use, what files I need, who to share them with, what I’ve modified, what others have modified, and what I’ve shared in a number of complex ways. This platform (of which the current Technology Preview exposes just a tiny bit) through a simple set of RSS/ATOM extensions has bridged a gap between our online relationships to people, and our relationship to our devices. When the mesh is connected to devices, Windows Live services, data, and available online or on a client, by managing the relationships between and among them all, it suddenly opens up a whole new world of possibilities.

If this is what we can expect from The Ray Ozzie Microsoft, I can’t wait to see more.

It’s interesting to me that Microsoft, a company whose most valued properties are its desktop operating system and its desktop office productivity suite, is pioneering the concept of a true Web OS. Live Mesh is essentially the ultimate aggregation service, offering us a way out of the defragmented web I spoke about in a previous post. I will have more to say about this when I have time (finals week is next week), but for now, I have to say this is the first real exciting thing I’ve seen Microsoft do since the .NET Framework and C#.

The key to success for this technology will be spreading it to as many platforms as possible. Take it to the Mac, take it to Windows Mobile devices, take it to Symbian devices, take it to the iPhone! The more the better. But they must focus on the mobile.

Via LiveSide.net. Props to Kip Kniskern who consistently writes some of the best “big picture” Microsoft web journalism I’ve seen.

John Nack, Senior Product Manager for Adobe Photoshop, recently announced the reasons for Photoshop’s delayed transition to 64-bit on the Mac:

As soon as we got the news in June, we began adjusting our product development plans. No one has ever ported an application the size of Photoshop from Carbon to Cocoa (as I mentioned earlier, after 9 years as an Apple product Final Cut Pro remains Carbon-based), so we’re dealing with unknown territory.

If Adobe is working to move Photoshop to 64-bit Cocoa, I feel like Apple has got to be working on a 64-bit Final Cut. The performance gains of a 64-bit Final Cut would provide awesome marketing leverage for Apple, and it would be yet another wonderful innovation in film post-production.

Now If with a capital I they’re working on a 64-bit Final Cut, there’s no way they wouldn’t have also started porting other Pro applications to 64-bit as well since (as I understand it) Apple’s Pro applications share a lot of common frameworks. Apple has been shipping 64-bit-capable machines for quite a while now, and as Adobe puts on the heat with Lightroom going 64-bit, I can’t imagine Apple not responding with a 64-bit Aperture in 3.0.

I don’t normally enjoy participating in this sort of speculation, but imagining a film post-production workflow that could be orders of magnitude faster than what the current generation of technology allows is too exciting not to share.

About a month ago I wrote about Apple’s Trojan-like move of using their Software Update application to distribute and install Safari on the computers of iTunes and QuickTime users, meaning, the millions and millions of people that use an iPod. As effective as the tactic may be in getting Safari on Windows desktops, I wrote, “that doesn’t excuse them from the adoption issue.” I began drafting an elaboration on the adoption issue then, but it quickly grew into its own essay which I’ve published here.

As the social web continues to grow, and as technology as a whole increasingly encroaches on the everyday goings-on of everyone, I’ve seen more and more the effects of what I call the adoption issue. I’ve defined the adoption issue as follows, with two separate but closely related meanings:

1. The time-consuming necessity of entering your personal information into a socially-oriented website, and building your network of friends, and
2. More generally, the barrier of entry for using a particular technology and the average person’s knowledge and use of that technology—i.e., its popularity.

The social web is augmenting the definition of “being social” into something much bigger. Into, I don’t know, being connected. Sites like Facebook and Twitter have enabled the previously separate spheres of cyberspace and reality to intersect in such a way that your Facebook profile is as much “you” to those who know you solely over the Internet as the “you” that your friends see everyday. This is the profound difference between the Internet a decade ago and the Internet now that merges your digital and physical identities, relationships, and data.

The trouble with this expanded social networkability is managing it all. I started an account with FriendFeed a little while ago and the problem made itself readily apparent: FriendFeed currently offers the aggregation of shared personal data from 35 different sites, and more have been added regularly. (Side note: I have the inclination to call sites like FriendFeed “life-sites” because they bring all the little snippets of your digital life together). Michael Arrington at TechCrunch and Josh Catone at ReadWriteWeb both made great posts on the need for social-networking aggregators (life-sites) like FriendFeed to offer two-way synchronization to keep us on top of the information heaps we subject ourselves to by participating in this fragmented, social web. They also highlight the importance of making our personal data fluid and portable, through initiatives like the Data Portability Project, Google’s Open Social, and perhaps most importantly, OpenID.

What all of these initiatives and APIs and sites have in common is the attempt to reduce the impact of the adoption issue. It’s crucial, even fundamental to continued innovation on the Internet. Invariably the biggest initial hurdle for every social site (which is, like, every new web company) is getting people to invest their time in becoming a member, by listing their favorite bands, films, quotes, et cetera—again—and then using the site for whatever social function it attempts to replace or augment or create. But, lest we forget, the usefulness of joining a new social web site is entirely predicated on how much your friends use them, a chicken and egg dilemma that Andy Ihnatko described eruditely in The Talk Show (Episode 19) about Twitter:

The first time you use Twitter, it’s like owning one walkie-talkie, where it’s a cool thing to have and you appreciate all the stuff that makes it work… but there’s nobody out there listening. There’s nobody out there speaking to you.

It takes your own personal investment in participating in each web community you sign up for to make them grow. This may even include advocating the new thing to your friends so they’ll sign up and participate, a chore which, I’ll tell you, you really don’t want to take upon yourself.

What the Data Portability project looks to motivate, and the direction that technologies on the Internet have always leaned toward, is a move towards a less controlled, yet more centralized concept of the individual on the Internet: a democratized, personalized Internet. This democratized Internet coincides (not coincidentally, I think) with the democratization of media on the Internet. If no one wants DRM on their music and videos, what would make them want the “DRM” of Facebook or Myspace on their own data?

The adoption issue is something of a novelty for software and technology. Only in the past ten years or so has broadband Internet access become so ubiquitous that we can even have social networking sites filled with our pictures, videos, and music. This applies to desktop software as well. Who (besides geeks) would imagine *downloading* something like Photoshop over dial-up in 1998? Furthermore, who (besides geeks) would imagine *editing their photos* in 1998? Technology has basically afforded us to take it for granted because the focus has finally changed from the tool to the user. However, in doing so, it also runs the risk of making people forget there may be a better tool out there.

Bringing this back full circle, Safari may well be the fastest, most standards-compliant browser out there, but it won’t do Apple any good to push it out semi-virally if most people that would even consider using an alternate browser only use Firefox because of the community of add-ons that surrounds it.

For that matter, if Apple, or any company that competes with another company with similar products, wants to overcome the adoption issue, they have to give people a compelling reason to use it (and make it easy to use, of course). Because to beat an establishment, you often have to change the rules of the game.

One of my favorite features of the current generation of game consoles has nothing at all to do with high definition graphics, surround sound, or revolutionary controllers. It’s about playing old games on a television again.

Retro gaming used to mean one of three things: digging your old consoles and games out of the closet; seeking out an old game (and the console to play it on) on eBay, craigslist, some other such website, or in flea markets and garage sales, turning your weekends into modern-day treasure-hunting quests, and often spending a tidy sum to do so; or downloading an emulator and finding ROMs for the games you wanted to play. No wonder piracy took off when the Internet went nova.

Now, thanks to Nintendo’s Virtual Console, Microsoft’s Xbox Live Arcade, and Sony’s Playstation Store, this is no longer the case. Even the PC has its own legitimate platforms for retro gaming now, the most successful of which (as far as I can tell) is Valve’s Steam platform, which carries (for example) id software’s entire catalog all the way back to Wolfenstein 3D from 1987(!).

These retro gaming platforms mark a dramatic shift for the gaming industry, because it the sign that it has become an industry with a past. Retro gaming is essentially a misnomer now. Just as old movies are old because they’re black and white and not broadly available in theaters anymore, games are now old because they’re some #-bit and no longer on the shelf—not because they’re completely unavailable or somehow “obsolete.” Imagine the millions of young gamers who have never seen, or only heard about games like Super Metroid… Now if they have a Wii connected to the Internet, they can be playing one of gaming’s finest space adventures in minutes.

That in a few clicks an interested or curious gamer can legitimately buy and play games that are up to 20 years old is another one of those things technology enables that makes you whisper “amazing” under your breath. You know how you do it. You don’t want to look or sound like a geek, so you just mutter the standard “cool,” or maybe you even brush it off a little and stamp a generic “makes sense” label on it. But in your head you’re going, “Wow.” At least, that’s been my experience with most technologies that impress me.

Yet another example of how new technology enables us to revisit or rediscover old technology, and why the future of retro-anything is putting it online.

Does anyone in Windows land understand what “innovation” is? To me, innovation means *new* ideas, new ways of doing things - doing things in a way that changes your perspective on how it was and should be done.

It seems like Microsoft and Windows proponents think innovation means doing something better than someone else - that innovation is inherently competitive. I disagree.

Innovation by itself has nothing to do with business whatsoever - it has to do with ideas.

You learn something new every day. Head on over to The Graphic Mac for a great little tip if you want more granular control over your Mac’s volume. You’re a Shift-Option-*Volume-Control-Key* shortcut away from fine-grained volume control.

From Joe Wilcox, via John Gruber:

“Earlier today, Apple released the Safari 3.1 Web browser for Mac OS and Windows XP/Vista. A couple hours later, Apple Software Update popped up on my daughter’s Sony VAIO, offering Safari 3.1 for download. I didn’t recall seeing an earlier version installed on the laptop. And I made no mistake: The Apple updater offered installation of new software, not something that had been there before.” 

Me, in June of last year:

“So, by extension, Apple might say, ‘If you want to experience Apple’s content the way it’s meant to be seen, here, install Safari.’ This could really make a difference over time, because a lot more people know about the iPod, iPhone, and even Apple, than they’ll ever know or care about what Mozilla or Firefox is. Apple’s mindshare is the feather in their cap in this fight.” 

I somewhat doubt the effectiveness of Apple’s Trojan tactic, because while it takes advantage of those users who just push OK when something pops up about security and updates (Windows Update taught them that), the real trick will be getting people to use Safari.

If Apple really wants to shake things up, they need to look carefully at the missteps and successes of Mozilla and Opera. Opera’s marginal market share is proof that claiming to be the fastest doesn’t make all that much difference in the end. Mozilla’s success is largely thanks to a fervently supportive user base and effective grassroots marketing. Apple does have a brand advantage over the other browser war players, but that doesn’t excuse them from the adoption issue.

Let the new era begin.:

“A device that already astonished people worldwide will now perform almost any desirable function, in a beautiful and revolutionary way. We truly stand at the brink of a user experience and software development revolution.”

(Via Cocoia Blog.)

I can’t wait to see how this changes the concept of the mobile phone and especially the personal computer.