Yahoo tries to innovate, Microsoft does what it always does

Yahoo, even in its present state as a punching bag for pundits, is able to innovate and is working to deliver on its promise to open its platform to developers and users. Microsoft, on the other hand, seems stuck in the 90's.

Witness recent announcements from the two companies.

Microsoft --

Microsoft announced their Interoperability Principles. This basically said that they will provide documentation to allow third-party developers to create applications that interact with core Microsoft applications. Microsoft pledges not to sue as long as the applications are non-commercial. How kind of them! They're really getting behind the open source movement, aren't they? Why would any developer try to use Microsoft's horrifically complex and non-standard document and communication formats unless they expect to make a buck from the effort? Microsoft will, of course, be happy to grant a license for a nominal fee...

This seems to be a grudging gesture, a minimal effort to comply with antitrust legal requirements deriving from Microsoft's tangle with the European Union. It is another missed opportunity and, due to its limited impact or usefulness, is pretty much a non-event.

Yahoo --

In the meantime, Yahoo announced they are releasing the APIs to their search service. This means that Yahoo is opening up its search platform to third-party software developers and web publishers. Third-parties will be able to submit "feeds" of data to Yahoo that will be included in search results. These feeds will include structured data -- such as reviews, photos, and contact information -- that can be displayed on the search-results page, providing a more robust and informative user experience than is currently available via the typical link and brief description. You can see a couple of really cool examples at this post on TechCrunch.

Not only is this approach innovative but it shows that Yahoo is willing to accept the fact that good content and good ideas exist outside its own company walls. They are making good on their pledge to open their systems in order to create more compelling content.

On the same day as the announcement described above, Yahoo also announced the launch of Buzz, an idea modeled after Digg where users can vote on news stories and the ones with the most votes get the most visibility. Yahoo will even be putting some of the news stories voted to the top on the Yahoo homepage, one of the most trafficked locations on the web. TechCrunch has a good post on this, too, if you are interested.

Conclusion --

After reading these announcements, which one makes you think the company in question has more creativity? Which one is acknowledging the current state of the Internet environment? Which one trusts the software development community and the Internet community as a whole to help create compelling applications that can benefit all involved?

If I had any confidence in the Internet savvy of Microsoft's top management, I might think the Yahoo acquisition is about injecting new blood into Microsoft's Internet business and embracing open systems. Unfortunately, I think the acquisition is strictly about banner ads and search advertising and, as such, is probably doomed to play out as so many ill-considered acquisitions do: layoffs, a cumbersome new entity that takes years to hit its stride, millions of dollars wasted on resolving redundancy and overlap and the pursuit of "synergy".

Disclosure: author does not own any shares YHOO or MSFT