First of all, nothing is going to happen for a long time. The board of Yahoo has to decide if they are interested in a deal with Microsoft, and if they want to haggle about the price. If the two companies manage to hammer out a deal, then there will most likely be some regulatory scrutiny both from the FTC in the U.S. and from the EU.

During this process competitors will do their best to derail and delay things. This is not necessarily because they don’t want the deal to go through. Anything that will prolong the distractions and the internal turmoil of Microsoft and Yahoo, is good for the competition.

Culture Crash

Having worked in this industry and in the Silicon Valley area for a long time, I know that the differences in corporate culture between Microsoft and Yahoo is like that of two different countries. (Robert Cringely thinks this is the whole reason for the takeover.)

This will lead to a mass exodus from Yahoo. Even though Yahoo has seen better days it’s still one of the original Internet startups. On the other hand, working for Microsoft has zero street cred in Silicon Valley.

Among the first to jump ship will be Jerry Yang and David Filo. Since this is an all cash deal they will have no stake in the combined company, and no reason to stay onboard.

Eyeballs

Yahoo is arguably the largest Internet property, with more traffic and eyeballs than anyone else. And they have an international presence that Microsoft lacks. But the overlap between the various Yahoo and Microsoft sites is significant: Hotmail and Yahoo Mail, etc, etc.

For a lot less than $44B Microsoft could have purchased more traffic by buying a dozen other companies. Besides, buying eyeballs seems so 1999.

Search

The search game is over. Google has won and they have moved on. Combining a distant #2 and #3 in any industry is not going to take over the leader, especially not in the search business.

If Microsoft wanted to beef up their search technology and related advertising services, they could have purchased all other companies in the search business, and still had change left over.

It’s Big

So why does Microsoft want to buy Yahoo so badly? Microsoft’s stock price has been essentially flat since Steve Ballmer took over as CEO and not much new exciting news has come out of Redmond in his time. He needs something big before he retires. And Bill Gates gets (to buy) a part of Silicon Valley history. Big companies and big egos need big deals.

What do you think?

If your goal is to hit the front page of Digg, then this tool can be useful in your quest. It’s free to use, no registration required. The company who built the tool is called QlickTech and for them it’s a showcase for their QlikView in-memory business intelligence application.

Companies spend billions of dollars on creating elaborate web sites promoting their company. Web site visitors and customers rarely care about your company. They want the information they’re looking for quickly. Blogs, RSS, gadgets and widgets, video and mobile browsers all make the web site more and more irrelevant.

The challenge for 2008 for you as an Internet business owner is to get in front of your customers through all these different channels and to provide a holistic customer experience across these fragmented interactions.

Video Saturation and the Raise of Brands

2007 was the year of the video and now there are more videos online than anyone can watch in a lifetime. How do you know what to watch when you’re tired of just “YouTube channel surfing”? How do you determine if a video is worth watching based on just a 1-5 star rating? 2008 will see the emergence of video brands that produce, compile or recommend videos for specific audiences.

Increased Use of CRM Systems

Are you inundated by poorly targeted marketing messages? Do you get multiple copies of the same message? In an increasingly noisy world, marketers who target their messages for specific segments of their lists will have an advantage. For example: prospects, customers and former customers should rarely receive the same emails. Top marketers like Rich Schefren and Perry Marshall have already implemented CRM. Many more will follow in 2008.

Increase in WordPress Security Exploits

In 2007 we saw several high profile security exploits where criminals used compromised WordPress blogs to add links to their own drug peddling web sites. Since WordPress is the worlds most popular blogging platform it is a very attractive target for exploiting any security holes. And there is a direct financial incentive for taking over thousands of blogs for the purpose of gaining high PR links or using the servers for other criminal activity like denial of service attacks or sending spam emails.

Continued Flood of Aspiring Internet Businesses

More and more people are lured by the Internet lifestyle and making money online. However as the competition increases the barrier to entry also increases. What used to pass as a $7 ebook will soon be difficult to give away for free. In terms of success stories Internet businesses will look more like the established book market: a few very well known authors always produce blockbusters, below that there is a large number of authors who make a living, and then there’s the majority of authors who sell less than 100 books. And that doesn’t even include the authors who never even get published.

There will be significant opportunities for those who can guide all these new aspiring Internet entrepreneurs up the path towards making a living online. There will also be opportunities for companies acting like traditional publishers. Who have the production and promotion machine ready to go and all the major JV partners lined up for new products.

Offshore Turning the Tables

In the past years most successful Internet businesses have outsourced many tasks to providers in countries with lower wages. In the next years these countries will have the greatest growth in Internet availability and Internet businesses. It doesn’t take much entrepreneurial spirit to realize the financial benefits of doing the work for your own Internet business, instead of working as an outsourcer for low wages.

Imagine the competition from tens of thousands of new Internet businesses emerging from these countries where they have significant (multiple orders of magnitude!) cost advantages over you. Welcome to 2008!

Other Interesting 2008 Predictions

• BBC
• Business Week
• Economist
• eMarketer
• McKinsey
• PC World
• Valleywag

• Armand Morin
• Clayton Makepeace
• Michel Fortin
• Robert X. Cringely

• 10 Media Trends To Watch In 2008
• A Quick Look at 2008 and China
• Google in 2008
• Looking Ahead - Tech Predictions for 2008
• New Media Predictions 2008

Did you know for example that you can increase your speed of typing on the iPhone keyboard significantly using this simple “Shift and Hold” trick:

Most keys don’t register your keystroke until you lift your finger. However the Shift and Punctuation keys are exceptions that you can use to your advantage.

1. To type a punctuation character, tap and hold the punctuation key (.?123)
2. The punctuation keyboard appears.
3. Drag your finger to the desired punctuation key.
4. Lift your finger.
5. The keyboard returns to the alphabet layout.

How could you know that? There are no hints in the user interface that might lead you to discovering this trick. As it happens I have a shortcut for you to discover this trick, and one hundred other useful tips and tricks about the iPhone.

I just finished writing an ebook called “101 iPhone Tips and Tricks“.

If you’re getting/giving an iPhone as a gift this holiday season, do yourself and the recipient a favor: get the ebook as a companion for the iPhone. It will save you a lot of time and headaches. And it will allow you to get the most out of the iPhone.

Looking for a last minute holiday gift? The ebook doesn’t require any shipping. You can download it immediately at the last minute. But don’t wait too long. You will want to take advantage of the special holiday pricing before it expires. Here’s the URL:

http://www.iPhoneTipsTricks.com

Useful

There are a lot of useless web pages out there. Copying content and rewriting content just for the sake of tricking the search engines is a game for losers. The mission of all search engines is to find useful content for their users. The search engines have you outnumbered and outpowered, so you might as well spend your energy creating useful web pages.

Updated

Search engines love updated content. That is why blogs and social media sites typically rank so well. Spend a few minutes every day updating your site. And harness the power of user generated content to get help from your readers.

Unique

If your web page stands out as the best in the world on a topic, then it will get traffic from all the people who are interested in that topic. It doesn’t matter who you are or how large your budget is.

Download the ebook here. It’s a short read. Definitely worth your attention.

This seems like a great deal, so what’s not to like?

In my experience the purchase price of a product is usually a very small component of the overall cost of the product. What is far more expensive is the time and attention you need to devote to the product to evaluate, study and implement it.

Before you download a free product - or purchase one - always budget the time and attention required to make use of the product. If you can’t afford it in those terms, then pass.

The other side of free giveaways is that the marketers want something in return for giving away their products: you attention. You will immediately be subscribed to their email lists and subject to their marketing messages. One Christmas giveaway that I signed up for last year has resulted in an additional 2,895 emails in my inbox. (Yes I am a bit obsessed with tracking…)

Never download or purchase something “just in case” you may need it in the future. Always follow the “just in time” research rule: look something up, download and purchase products only at the time when you need it for moving a project forward.

You should first check your web analytics to see where you’re visitors are currently coming from.

If you see a large percentage of your visitors coming from Redit you should make sure that you bookmark your own posts on Redit since you have an audience on that site.

Then look for other social media sites that carry similar stories as the topic of your blog. Create an account on those sites, add your own stories and track the results. If you spend a lot of time adding your posts day after day and you don’t get any traffic from that source, then drop it and move on to the next social media site.

Your visitors collectively will discover and use more social media sites than you ever can by yourself. So continuously check your web analytics for new traffic sources and exploit those that work for your site.

How many social media sites have you tried? Do you track your results or just blindly attack as many as possible?

You should batch your activities as much as possible for maximum efficiency. This includes purchases. And if you end up with less stuff, that’s not a bad thing.

Think about your purchases and make them count. Especially in this holiday season.

This is a terrible waste of attention. And if the business has a different product they’d like to sell to the people on the list they first have to overcome the bad-will generated by the poorly targeted messages they have inflicted on their list subscribers.

One possible solution to this problem is to use a CRM (Customer Relationship Management) system that tracks all interactions with a prospect or customer. The CRM system knows all products a customer has purchased, all emails that have been sent to the customer and which of those were opened and in which of those the customer clicked on a link. With all this information you can filter out messages that try to sell a product the customer has already purchased, filter out messages on subjects the customer is clearly not interested in, etc. The remaining messages will be better targeted and will receive the attention they deserve.

I don’t think it’s a coincidence that Rich Schefren used a CRM system (in this case Infusion) for the launch of The Attention Age Doctrine Part 2.

Where are you on the scale of customer communications: Using Outlook to send all outbound emails, Using an autoresponder service, Using a CRM system?

Here are 3 reasons why you may want to pay attention to new social media startups:

1. The user communities on Digg and other established sites are so large and often well organized that it’s very difficult to get up on the first page. With a smaller site the threshold is much lower.
2. Many new social media sites try to niche themselves to establish a foothold. If your site is in the same niche that’s a great match and you’re more likely to get your blog posts ranked higher than on a general site.
3. If you’re looking to game the system, then an upstart probably does not have all the sophisticated systems in place to detect your deceptive actions, whereas Digg has most likely already seen everything you can imagine.

But the flip-side of a smaller site is of course that they have a lot less traffic that they can send your way. Compared to the immense audience on Digg most new social media sites don’t even register as a blip on a graph.

Have you tried Mixx yet?