Woowar

• TimeWarner wants to get rid of AOL via merger/acquisition at a sensible price as soon as possible
• Microsoft still needs to boost its weak position in online content delivery
• The current Yahoo board still wants to defend against Microsoft offers which is (misguidedly, probably) views as undervaluing Yahoo
• There is a Yahoo annual meeting on 1st August - could that result in changes in composition of the board, or changes in strategy?

Once again, the press focus seems to be primarily on the search and advertising businesses, because Google is seen as a highly-successful benchmark. But the ITWire article also mentions (on page 3) that anybody who acquires AOL will also get their hands on Bebo: okay, it's not Facebook, but Bebo is a significant player in the Social Networking world, and that could appeal to Microsoft. If nothing else, it would give them a good lever to exert more steering pressure on the direction that Facebook (already snuggled up to MS anyway) takes. I'm not saying I like this idea, by the way, but I can see it appealing to Microsoft.

Interestingly, though, there are a stack of things lurking around in Yahoo's portfolio that Microsoft could also get their hands on if a full acquisition (not just the search business, as is one of the rumoured options) goes ahead. Let's take a quick look.

Del.icio.us

Yahoo bought the del.icio.us 'tagging' site in 2005. It's been kept as a separate brand, although del.icio.us (is it only me that gets bored of typing that?) technology has started to be incorporated into Yahoo search results. If this becomes part of the Microsoft stable then it won't be long before Internet Explorer has native support for del.icio.us tagging. But what else? Will we see del.icio.us tagging built into the Windows OS, and/or into Office, for instance?

Flickr

Yahoo was obviously hungry in 2005, as it also snapped up the photo-sharing site Flickr. If you've not seen the Microsoft Labs Photosynth demo I suggest you watch it now ... and then stop and think what might happen if the company that's creating such great technology (yes, innovation) suddenly has unfettered access to the many millions of photos (including yours and mine) that are on Flickr. Cool, or scary? Or both?

So, taken together, Yahoo owns two of the best-known and most widely-used 'Web 2.0' sites on the internet, even though they're not branded as Yahoo. To add to this though ...

Zimbra

This is possibly the most intruiging. Zimbra is a highly successful (they claim 11 million users and growing) open-source email-plus platform. It has some great front-end AJAX user interface staff (mind you, so does Outlook Web Access). There's constant development going on with this product set: in February Zimbra announced a wide range of enhancements, including support for the Blackberry Enterprise Server:

Enhancements in ZCS 5.0 extend Zimbra's best-of-breed anywhere access on the desktop, including support for Microsoft Outlook 2007, and on virtually any device, with support for BlackBerry Enterprise Server, J2ME-enabled handsets such as the Motorola RAZR, and a new version of ZCS for mobile web browsers. New features in the award-winning Zimbra AJAX Web client include instant messaging, briefcase, and task applications as well as Zimbra Desktop, the world's first offline-capable Web 2.0 collaboration experience.

Zimbra's commitment to being a partner of choice has been rewarded by 35 percent service provider customer growth in the last quarter alone and a majority of Zimbra's revenue is now driven by its partner channel. Zimbra now serves customers in over 70 countries, a 40 percent increase of its global reach from Q3 to Q4 2007. Over 300 new universities have adopted Zimbra in the past year, driving unparalleled growth in the education market.

ZCS 5.0 builds upon Zimbra's significant momentum in the e-mail market, highlighted by a six-fold increase of its customer base in 2007 and a current total of more than 11 million paid mailboxes.

"Support for BlackBerry Enterprise Server is a huge advantage for Zimbra. From a business standpoint, it's the last box to check in a product evaluation, and Zimbra is the only open platform that offers it," said David Smith, group technical director, Gyro International Ltd.

Karen Hobert makes some interesting points about the commoditisation of email. This trend will definitely hit Exchange hard, as it just does email: so the Zimbra element of the deal would help Microsoft get in at that lower price-point in order to retain overall market share. The same price-sensitivity is, of course, also going to impact IBM's Lotus Notes/Domino product set, which is presumably where products like Lotus Foundations and Lotus BlueHouse are heading.

Superficially, therefore, this seems like a good deal: Microsoft gets its hands on some neat, clean Web 2.0 technology, and some whizzy offline web client stuff, can start competing on the same turf as Google Apps, and mops up an increasingly successful enterprise email vendor into the bargain. But ... Zimbra is open source and is based on Java. Neither of which facts will go down well with the 'not invented here' crowd. So what does Microsoft do? They might:

• sell Zimbra off with the seemingly inevitable result that it becomes a major competitor
• underinvest and let Zimbra die a natural death (which might be relatively quickly, given that a significant proportion of Zimbra customers will have had "it's not Microsoft" somewhere near the top of their product selection criteria)
• spin Zimbra off as a separate arms-length business and keep a shareholding
• port it to .NET and keep it as a separate product line
• or port it to .NET and try to merge it into the existing Exchange/Outlook product line

Of these, the last two seem far-fetched. Depressingly, the second seems most likely to me: let it wither on the vine. Why? Well, I'm looking at what Microsoft did with Groove. They bought into (and then bought outright) an outstanding product, run by an enterpreneurial visionary (Ray Ozzie - now Microsoft CTO in place of Bill Gates), that could have been the "Lotus Notes killer" that they've hankered after for so long. But then for whatever reason - perhaps the Microsoft techies don't "get" Groove in the same way that they never "got" Notes - Groove has languished and is now merely a weird add-on thing you only have if you buy the super-duper edition of Office: nobody uses it and it seems destined for obscurity and obsolescence. A sorry tale for a potentially great product, although admittedly quite a relief for those that earn their living working with Lotus Notes/Domino.

So, three great software products that could soon be part of the Microsoft stable. If you were M$ would you be happy with just the beleagured search part of Yahoo, or would you want to get your grubby mits on the whole caboodle? Other Yahoo-owned sites which might be worth a look if you fancy some more wild conjecture include Bix - an online contest site; and MyBlogLog - a blog-based community site.

In this mini-article, I've tried to pick out a few of the aspects of this potential deal that are not, I feel, getting the coverage they deserve. Of course, with a deal of this size, there are many many angles to consider it from ... what's yours?