I’ve been reading about the rekindled Microsoft/Yahoo talks; perhaps it’s a good sign. It just seems so obvious that Microsoft doesn’t yet understand the internet, and so inevitably can’t really take it seriously enough. It’s got a dozen years of half-hearted efforts under its belt and not much to show for it, other than the dominance of Internet Explorer, which continues to slowly lose share to Firefox.

A BBC report quotes one analyst, Matt Rosoff, as saying, "I do not understand what Yahoo would get out of the deal, including that there are people there who don’t want to work for Microsoft." Well, that really says it all!

Nowadays, there are a lot of people who are trying to get away from Microsoft. After 27 years of being their customer, and 23 years of using a Mac, I’ve learned to pick and choose their offerings, rather than just drink their kool-aid and swallow the whole enchilada. I don’t at all want them to go away, but it would be really nice if they would be honest with themselves, accept what their true strengths and weaknesses are, and stop trying to be all things to all people, in order to keep most all the pie to themselves. That strategy is just not working anymore, and after years of disappointments, the reality is starting to be generally acknowledged.

As I’ve noted before, I thought MSN Spaces (where I have my personal blog) was one of the better things they’ve done, but they’ve made it increasingly Windows-centric as the Live Spaces rollout has continued, which has made it clunkier and more difficult to use, at least for non-Windows/IE users. I don’t expect Microsoft to be Apple, but after all their years of vaunted usability testing, they still don’t get basic design principles.

Everyone knows that Toyota’s cars aren’t that stylish, but they’re well-made, and Toyota (as it has recently) will put the brakes on to ensure a consistently high-quality product. Microsoft isn’t going to have the style of Apple, but they need to develop some decent processes like Toyota, so they can produce a quality product that meets customers’ needs.

Quality is a long-view strategy. In the short run, Toyota sells a bit fewer cars because they last longer, but in the long run, they sell a lot more, and pretty soon even more than GM. Bill Gates once said that his favorite business book was Alfred Sloan’s My Years With General Motors, but the days when one company could dominate a global market and put out mediocre products, in a strategy of planned obsolescence, are long past.

At least Microsoft is reaching out to a company that has some insight. I’ve always thought Yahoo was a bit clunky itself, but they are innovative and do understand the potential of the internet. Maybe Microsoft is at last acknowledging that they don’t get it, and that their culture needs to change.

I suggest that they start by returning to a more inclusive strategy on their online offerings. Don’t automatically expect users to be running all Microsoft software (e.g. IE and Windows), and so don’t penalize users who are using some MS software, just because they aren’t using all Microsoft software! In an era of open source and global markets, all that strategy will do is ensure that eventually no one will be using any Microsoft software.

Microsoft has to accept that they can no longer expect to get the whole pie, except for the crumbs, and that they better be glad for whatever share than can get, without coercion. They still have a lot of talented people; if they revitalize their culture and get their processes right, they could still do really well, and I hope they manage to pull it off.