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Chapter 354 Yahoo's Misfortune

When news of Microsoft's announcement that it was abandoning its instant messaging and personal email businesses spread throughout the capital markets, the reaction was nothing short of a collective frenzy.

Almost all voices have elevated this decision to a strategic pinnacle, as if Bill Gates had suddenly found the ultimate answer in a business textbook.

Major media outlets are eager to make Microsoft's decision to divest itself the smartest business move of the year. The sheer scale of the event makes it seem like Microsoft has acquired Google.

The Wall Street Journal was the first to raise the banner of praise, directly throwing out the headline—"Business optimization, Microsoft is back on the right track."

The article is filled with praise for Microsoft's wise decision, and the comments take the praise to a whole new level.

"This is not admitting defeat, but upgrading."

"Whether Microsoft likes it or not, Google Messenger and ICQ have already established a dominant position in the instant messaging market."

"Like a foil, it only highlights the greatness of Google Connect."

"Instead of spending a lot of money every year to copy Google's technology, making yourself look like an imitator and facing ridicule from users, it's better to give up completely and abandon that slim hope of catching up, which is comparable to winning the lottery."

"That's not perseverance, that's just going against money."

On a strategic level, The Wall Street Journal is telling everyone that Bill Gates is a master strategist: "In terms of business, Microsoft lost, lost miserably, almost lost everything; but in terms of strategic planning, Microsoft rediscovered its core and won spectacularly. It was a brilliant decision to sacrifice the small gains to save the big ones."

The Wall Street Journal went to great lengths to praise Microsoft's decision to sell nearly ten million personal email users to Google Mail for a mere dollar—a price that was almost humiliating. They went so far as to lavish praise on it, calling it one of the smartest business decisions ever: "Microsoft's decision to abandon its personal email business and sell nearly ten million users to Google Mail for a dollar is absolutely the wisest decision Microsoft has ever made. This isn't a humiliating fire sale; it's a successful transfer of a hot potato. Google Mail may seem to have gotten a bargain, but in reality, it's taken a ticking time bomb."

To support this viewpoint, the article also revealed the inside story of the email industry: "According to information obtained by this newspaper, whether it is Google Mail, Hotmail, or Yahoo Mail, they have always been operating at a loss in the personal email business."

"What does a large user base represent? It means ever-increasing server maintenance, operating, and marketing costs, pushing up overall business expenses. Now that Microsoft has ceded the market to Google Mail, it's also handing over a heavy burden to the latter."

"Google will have to carry this money-losing business forward from now on. It's time to test Gmail's operational capabilities in this area."

The Wall Street Journal hailed Microsoft's decision to retain its enterprise email service as a stroke of genius, stating that "the choice to retain the enterprise email service is the strongest evidence that Microsoft's management has come to its senses, like a lost person suddenly finding a compass."

"In the enterprise email business, the industry's profit margin is as high as 51%, while Gmail, with its unparalleled advantages in security and office applications, boasts an even higher profit margin of 73%."

"This is a business with very promising prospects and clear profitability. Microsoft knows better than anyone that the enterprise market is the real money, while the consumer market is just bloated. By abandoning the bloated market and embracing the lean and strong, Microsoft's strategic adjustment is worthy of being included in the business school case study library."

While The Wall Street Journal was enthusiastically praising Microsoft, USA Today was not to be outdone, commending Microsoft's strategic adjustments while also labeling it as a responsible large corporation.

"Gates' intelligence has finally returned to its peak, and he is no longer as obsessed with instant messaging and personal email as before. In particular, the retention of enterprise email is the biggest highlight of this strategic adjustment, like a beacon in the darkness, illuminating Microsoft's future."

To highlight the potential of the enterprise email market, USA Today also presented more detailed data: "According to data from the first quarter of this year, the enterprise email market has exceeded $12 billion, with a growth rate of over 45%. Almost all professionals are optimistic that this market will break through the $10 billion mark in the next decade."

"Microsoft is now focusing its attention on this branch, which not only allows it to concentrate its R&D investment and avoid previous R&D waste, but also because it has recognized that there is little competition in this market, which is practically a blue ocean uncharted territory."

As for Microsoft's decision to extend the termination of ICQ service by three months, it's almost like they deserve an award for corporate responsibility. "ICQ will be discontinued in three months, giving users ample time to migrate their data to other platforms. This arrangement reflects Microsoft's responsibility as the largest company in the United States..."

At Google headquarters, looking at the news on the table, Ernst looked up at Hamilton. "Are you sure we beat Microsoft? I have a feeling Google got acquired by Microsoft."

Hamilton paused for a moment, then burst into laughter.

"Microsoft is willing to spend money on public relations, so we can't just stop the major media outlets from making that money, can we?"

"It doesn't matter what the media writes, as long as investors can understand it."

That's true. Businesses don't need to be responsible to the public; they only need to be responsible to their investors.

Microsoft's stock price rose, but Google-related stocks rose even more, which also shows that the capital market has greater confidence in Google.

Just as Microsoft was being hailed as a paragon by the media and Google was quietly making a fortune, both companies were secretly pleased with themselves. However, a major internal conflict was unfolding in Yahoo's meeting room, with an atmosphere so tense that it felt like a powder keg that could be ignited at any moment.

After a long silence, CFO Jimmy finally couldn't hold back any longer. He slammed his hand on the table, breaking the silence in the conference room. His tone was full of accusation, like a firecracker that had been lit and exploded as soon as he opened his mouth.

"I told you long ago, abandon the email business, abandon the email business! But you all acted like you didn't hear me. Now look what's happened, Google has unified the North American personal email market, and next they'll be focusing their attention overseas. Our email business overseas will definitely suffer a major blow, and all our previous investments will go down the drain!"

Jimmy became increasingly agitated, spitting as he spoke. "Yahoo's first-quarter financial report showed a huge loss. If it weren't for the good internet market and our revenue reaching our target, do you know what the consequences would have been?"

"It's the drop in stock price that means Yahoo's hard-earned wealth will all go down the drain, and then we'll all have to pack our bags and leave."

He scanned the people in the conference room, his dissatisfaction almost palpable in his eyes: "Who will take responsibility for this? Who will explain this to the investors?"

Alan, who had initially championed targeting Yahoo Mail's overseas market, now had a flushed face and glared angrily at Jimmy. Anyone could tell that there was a barb in Jimmy's words, and that barb was aimed at him.

Alan didn't back down either, retorting, "When I came up with this idea, you didn't object, did you? Now that the plan has failed, you're washing your hands of everything, acting like nothing happened. Why should I take the blame?"

Alan was so angry that his chest heaved, feeling extremely frustrated, not only because of Jimmy's accusations, but also because of Microsoft and Google, the two instigators.

He cursed Microsoft inwardly, thinking, "What a coward with your market value of hundreds of billions! Why don't you stand up to Google? You could have fought Google to the bitter end and maybe even won. Instead, you just led the way in admitting defeat and sold your users to Google."

What brilliant decision? It's just a lack of business acumen!

And then there's Google. I don't know what's wrong with the brains of Google's employees. Not only did they ruin the situation, they also directly killed Bill Gates.

Couldn't you have been a little gentler and pulled back and forth a bit?

Even if you're in a rush, you still need some foreplay. You bunch of tech geeks, don't you know this most basic common sense?

You two seem to be having a great time selling and buying, but are you targeting me?

Jimmy, after being rebuked by Alan, retorted, "I acquiesced, but that doesn't mean I support it! I didn't object at the time because I wanted to see if your plan would work, and what happened? It didn't work at all! Now that there are problems, who else can I turn to if not you?"

Alan's temper flared even more, and he pointed at Jimmy's nose, yelling, "What the hell is the difference between you and someone seducing a girl, getting her pregnant, and then blaming her for not using protection? You're utterly shameless!"

"Now that there's a problem, you're trying to absolve yourself completely? There's no such thing as a free lunch!"

Seeing that the two were about to fight, and the profanities escalated, Yang Zhiyuan, sitting in the main seat, finally lost his temper and shouted, "That's enough!"

That shout was like a thunderclap from a clear sky, instantly silencing the conference room.

Yang Zhiyuan watched the two of them shifting blame to each other, his head throbbing with pain, and he felt extremely irritable.

He took a deep breath and said slowly, "Now is not the time to argue. Let's talk about the specifics first and see if there's any chance we can salvage the situation."

Upon hearing Yang Zhiyuan speak, an employee immediately stood up and reported, "With Microsoft selling its personal email business to Google, Google's market share in North America's personal email market has reached nearly 90%, exceeding 70 million users."

He glanced cautiously at Yang Zhiyuan, and seeing that the other party had no reaction, he continued, "As for our Yahoo Mail, because we have devoted all our resources to overseas markets during this period, we have not invested any resources in developing new users domestically, and the number of users has declined for three consecutive months."

"Taking data on users who logged into their email within a week as an example, there are only 370 million users left, and the number is still decreasing. At this rate, the number of users in North America will drop below three million in less than a month."

Yang Zhiyuan's tone was completely flat, as if he were talking about someone else's business, as he asked, "What about overseas? Our overseas operations can't be this bad, can they?"

The other party quickly replied, "Our user growth overseas has been quite rapid. This is mainly because Google and Microsoft previously focused their main efforts on North America and didn't have time to manage overseas markets, so we took the opportunity to seize some market share."

"Currently, Yahoo Mail has over 810 million registered users overseas, which looks pretty good. But Google is about to turn its attention overseas, and it remains to be seen whether our user base can withstand the impact of Google Mail."

Jerry Yang was silent for a moment, then looked at Jimmy and asked, "Could we contact Google and sell our email accounts to them as well? Since we can't continue, we might as well sell them while they still have some value and minimize our losses."

Jimmy's face turned ashen, as if he had swallowed a fly, but he still forced himself to say, "The overseas business might be sold at a low price, but the other party has no intention of taking over the North American business."

Yang Zhiyuan frowned and asked in confusion, "Why?"

Jimmy provided the answer: "Because of antitrust. Google now holds nearly 90% of the personal email market in North America. Anyone with eyes can see that Yahoo Mail can't hold on. It's only a matter of time before Google Mail dominates the market."

"However, the user's choice is the user's choice. If Google acquires us, it will leave a handle for the outside world, an antitrust handle, and then the US Department of Justice will have to cause trouble for them."

"Google would never do that; they don't want to get into such big trouble for such a small amount of business."

"But the overseas market is different. Western countries and Japan and South Korea have launched their own email services. Although their market share is not high, at least they have competitors, so Google is not allowed to dominate and will not be subject to antitrust investigations in various countries."

"Our overseas business may still have some value and can be sold for some money, but our North American business is just going to rot in our hands."

After hesitating for a moment, Jimmy glanced in Alan's direction, as if deliberately provoking him, "Although we've lost tens of millions of dollars in the email business, I still advocate ending it as soon as possible. Once Google has developed its overseas market promotion plan, they can seize the market themselves. Even if we want to sell then, they might not necessarily buy it, and we'll truly lose everything then."

"Some people's plans are destined to fail, so there's no need to hesitate any longer."

Upon hearing this, Alan's anger, which had just subsided, flared up again. She wanted to retort, but Yang Zhiyuan stopped her with a look.

The mess he was in was giving him a headache. At this point, it was crucial for the team to stay united, otherwise morale would truly collapse.