FAIL: Microsoft's Hostile Acquisition of Yahoo!

Microsoft and the Media are focused on the wrong target. At $31, Yahoo is being valued at $45 BN. Assuming a 40% acquisition premium, Amazon also costs $45 BN.

This is part I in a multi-post series that will be edited in real-time over the next several weeks:

Amazon Web Services (AWS) launched in 2002, and has revolutionized the entire Internet infrastructure model. AWS disrupts storage, hardware, hosting and content delivery markets, and is increasingly the most strategic service for thousands of Internet services. The AWS team is outstanding. Rackspace, Joyent and Media Temple provide small-time competition, and Google only released App Engine in 2008, giving Amazon the undisputed leadership position in utility computing.

Amazon has spent the past several years developing emerging leaders in digital downloads. MP3 is more open and flexible than iTunes, the Unbox + TiVo integration represents an important implementation in the Set-Top / TV services market, and the Kindle appears to be exceeding Amazon’s internal projections. Digital technology continues to impel fundamental change in media distribution, and Amazon is well positioned.

In retail, Amazon has the most comprehensive user-generated review database and Prime ($79 = free 2-day / $4 next-day shipping), the cost-effective answer to many Internet shipping problems; the alternative is a Big Box experience and $4 gas. Ultra-competitive prices and the most diversified inventory (1st + 3rd-party) make Amazon the online Wal-Mart. Why use a comparison shopping engine when Amazon offers everything at great prices, in one location, with convenient service?