The Hulk of Redmond

THE MICROSOFT CORP., in its usual deliberate way, has just announced that the Service Pack for its Vista operating system will be ready for release next month. This pack contains a series of improvements that will address problems that Vista users have encountered since the computer operating system was introduced - in January 2007. If Microsoft is so slow with fixes for one of its core products, it's reasonable to wonder how it would fare in the cutthroat marketplace for Internet advertising.

That's where the huge company wants to go, as shown by its offer to buy Yahoo Inc. for $44.6 billion.

Yahoo also has been slow to seize the advertising opportunities presented by the Internet, but it remains popular as a Web portal and e-mail service. Microsoft is betting that it can combine the talents of Yahoo engineers in Sunnyvale, Calif., with its own in Redmond, Wash. "We get an opportunity to invest in more innovation," said Microsoft chief executive Steve Ballmer.

Would one really be better than two? If the deal goes through, Yahoo and Microsoft executives will devote enormous energies to blending the two cultures. And for every takeover that works (Hewlett-Packard and Compaq) there are those that fail (Chrysler and Daimler-Benz), or seem beside the point (AOL and Time Warner). Microsoft shareholders need to press Ballmer hard about the true costs of acquiring Yahoo.

Microsoft, with a market capitalization of $273 billion, is so huge that the Internet ad leader, Google Inc., has offered Yahoo help in thwarting the takeover. Antitrust concerns will limit Google's involvement, but this battle is a distraction for the companies when they ought to be trying to develop new uses for the Internet on their own.

All three companies want to create systems that allow advertisers to purchase time easily on existing mediums and ones that may just be emerging, such as cellphones. This is a volatile, uncertain field, and Yahoo ought to think twice before subordinating itself to a lumbering giant.

Meanwhile, many PC users are complaining that Vista is bloated with extraneous features and is slow to start. The Service Pack is intended to speed it up. Microsoft, which took six years to develop Vista, should have gotten it right the first time.

Apple Computer is buying television ads comparing awkward Vista with the smoother Apple Leopard system, introduced last fall. And sales of Macs are inching upward. That $44.6 billion might be better used on the Microsoft core product or spun off to stockholders so that they could invest in start-ups. The quest for Internet ad dominance will divert Microsoft from what ought to be its prime goal: the creation of a Windows operating system that makes personal computing a worry-free, fun experience.

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