Bill Gates

At first, it was sort of because they just didn't take it seriously enough. When Google first started in 1998, I think there was a lot of skepticism that the auction based advertising business would really work. And then there was skepticism that it would really scale. And then when it went public, people were sort of looking at it, almost freaked out at how profitable it was.

At first, it was sort of because they just didn't take it seriously enough. When Google first started in 1998, I think there was a lot of skepticism that the auction based advertising business would really work. And then there was skepticism that it would really scale. And then when it went public, people were sort of looking at it, almost freaked out at how profitable it was.

And then even after that, people didn't really realize that being the market leader at search was way better than being number two. There's these massive, massive returns to scale. And the reason for that is just pure marketplace liquidity. If you have the most searches, you can create the best data from the searches and you can return all the best results because you have the most data.

And then even after that, people didn't really realize that being the market leader at search was way better than being number two. There's these massive, massive returns to scale. And the reason for that is just pure marketplace liquidity. If you have the most searches, you can create the best data from the searches and you can return all the best results because you have the most data.

And on the advertiser side, you have the most advertisers who are willing to come in and bid to the highest possible price. You just get to make the most money by a country mile versus other search engines.

And on the advertiser side, you have the most advertisers who are willing to come in and bid to the highest possible price. You just get to make the most money by a country mile versus other search engines.

Google's search as monetized by an ad-based auction is one of the world's true marvels. It's one of capitalism's greatest discoveries.

Google's search as monetized by an ad-based auction is one of the world's true marvels. It's one of capitalism's greatest discoveries.

Yeah, it's criminal that we haven't. So Microsoft is really nowhere to be seen in search. And part of it was just thinking, oh, well, search is just a feature of MSN. But there's all these other reasons to come to MSN. Or, hey, this is a product in the portfolio of Windows Live, and we can kind of do it with the talent that we have here.

Yeah, it's criminal that we haven't. So Microsoft is really nowhere to be seen in search. And part of it was just thinking, oh, well, search is just a feature of MSN. But there's all these other reasons to come to MSN. Or, hey, this is a product in the portfolio of Windows Live, and we can kind of do it with the talent that we have here.

Ultimately, someone needed to grab leadership at Microsoft early, 2002, 2003, shake them and say, nothing else matters in the next five years except you figuring out how to meaningfully participate in search revenue because that is just the next big wave in technology and it's a fantastic business. Yeah.

Ultimately, someone needed to grab leadership at Microsoft early, 2002, 2003, shake them and say, nothing else matters in the next five years except you figuring out how to meaningfully participate in search revenue because that is just the next big wave in technology and it's a fantastic business. Yeah.

So in 2008, Microsoft puts a deal on the table that gets bid all the way up to $47 billion to buy Yahoo. This was effectively their last Hail Mary to become relevant in search. They actually didn't launch Bing until 2009. Google was started in 1998 and went public in 2004. And Microsoft got serious about a branded search engine in 2009.

So in 2008, Microsoft puts a deal on the table that gets bid all the way up to $47 billion to buy Yahoo. This was effectively their last Hail Mary to become relevant in search. They actually didn't launch Bing until 2009. Google was started in 1998 and went public in 2004. And Microsoft got serious about a branded search engine in 2009.

After a bunch of negotiating and flying back and forth, finally, both David Filo and Jerry Yang fly up to Seattle, and Steve Ballmer goes to Boeing Field, and they have a meeting at the airport. This is one of the great what-if scenarios.

After a bunch of negotiating and flying back and forth, finally, both David Filo and Jerry Yang fly up to Seattle, and Steve Ballmer goes to Boeing Field, and they have a meeting at the airport. This is one of the great what-if scenarios.

Right? It's totally right. There's conflicting reports of what happened. From what I can tell, Bill and Steve kind of looked the Yahoo guys in the eye and decided... These guys are kind of jerking us around. They really don't actually want to be a part of Microsoft at all.

Right? It's totally right. There's conflicting reports of what happened. From what I can tell, Bill and Steve kind of looked the Yahoo guys in the eye and decided... These guys are kind of jerking us around. They really don't actually want to be a part of Microsoft at all.

And this has gotten so expensive that if we execute the transaction, or God forbid they even try to negotiate up even higher, it's just not going to go well because it's going to be an organ rejection here. So the deal completely falls apart. It's interesting to try to look at the deal and figure out, even at that high price of $47 billion, was it a good deal for Microsoft?

And this has gotten so expensive that if we execute the transaction, or God forbid they even try to negotiate up even higher, it's just not going to go well because it's going to be an organ rejection here. So the deal completely falls apart. It's interesting to try to look at the deal and figure out, even at that high price of $47 billion, was it a good deal for Microsoft?