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Will Yahoo! Protect Open Source Assets?

On Friday, Microsoft CEO Steve Balmer sent a letter to Yahoo!’s board of directors informing them that time was running out for the Yahoo! board to accept a buyout offer from Microsoft. The nature and tone of the letter may betray Microsoft’s true intentions with regards to Yahoo!’s properties and raises some serious concerns.  

When the initial buyout offer was made, Microsoft was in the midst of making nice with the open source community. It was suggested that Microsoft was playing nice with open source folks not so much because of their problems with the EU, but to help ease the Yahoo! takeover. Based on the tone of the letter from Balmer to Yahoo!, it looks like the gloves have come off and Microsoft has come out swinging.

In his letter to Yahoo!, Balmer warns that continued stalling by the current executives may lead to a hostile takeover bid whereby Microsoft would appeal directly to Yahoo!’s board to elect officers that would approve the deal. Whereas Microsoft spun the initial offer as a good thing for both companies, offering shareholders a 60+% premium on the share price, the rapid move towards a hostile takeover could have serious consequences for the open source community.

Microsoft is pressuring Yahoo!’s board to take quick action or face a proxy battle, because it can. Late last month after Microsoft’s initial bid and Yahoo!’s initial rejection, Yahoo!’s board as well as financial analysts were underwhelmed with presentations made to the board by Yahoo! CEO Jerry Yang’s team outlining their vision of Yahoo!’s “true value” ahead of their upcoming financial report.
Yahoo!’s reliance on open source technology and their participation in the open source community stand little chance of helping to foster a more open source friendly attitude at Microsoft if Yahoo! is rushed into a badly thought out deal with Microsoft to appease stockholders.

The Yahoo!/Microsoft merger is going to be a major test of whether public companies that rely on open source technology have a net benefit for the open source community. Will Microsoft kill Zimbra, the open source mail server company Yahoo! recently acquired that competes directly against Microsoft Exchange? What will happen to YUI, Yahoo!’s open source JavaScript user interface? Will it just become a Visual Studio plugin? Both Yahoo!’s and Micorosoft’s handling of these issues will shape open source attitudes towards enterprise participants for many years to come. This will affect not only Yahoo! and Microsoft, but Google, Amazon and countless others big and small as well.

Will Yahoo!’s existing company bylaws, their board, voting shareholders or executives seek to protect open source resources during the merger or will it all be about the money?

by Greg Knaddison on Apr. 10, 2008

Protect how, exactly?

They're open source, so they are already "protected" because anyone can fork the code at any time. If Yahoosoft does merge and does decide not to support any of these programs then their communities and pick them back up and run, run, run all the way to a continued life with a new set of sponsors.

If the project dies...it was probably never all that valuable to begin with.

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by Peter on Apr. 10, 2008

Thank you for finally writing a post that actually talks about something meaningful, as opposed to how much money a bunch of rich old white dudes can extract from their portfolio companies.

As for the worth of once-active projects, I imagine they many were valuable at one time. Projects and companies and ideas die all the time - sometimes to be reborn - that's doesn't mean there were 'never all that valuable to begin with' - it just means that things happened to help bring about their demise, whether those things were better ideas emerging, or for-profit enterprises helping to kill them off, or the lead developers deciding that eating was useful to one's life expectancy, etc.

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by lnxrks on Apr. 11, 2008

@greggles - very true - the market will sort out the actual benefit of a project. However, I'm not sure how many projects are actually passionately supported by Yahoo, and if they are unable to do so because of 'fiat', the community may take some time in picking up those projects, leaving users to scramble for alternatives... A kink in the works for 'political' reasons, as opposed to technical reasons... Always frustrating.

The movement is strong now, so it can absorb such movements - it would be nice to know which projects would really be impacted by the merger if any.

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