Paul Graham used to work for Yahoo!. He's written about why Yahoo! failed. One reasons, he says, is because they were paralyzed by fear of Microsoft ...
Paul Graham - what Happened to Yahoo
... It's hard for anyone much younger than me to understand the fear Microsoft still inspired in 1995. Imagine a company with several times the power Google has now, but way meaner. It was perfectly reasonable to be afraid of them. Yahoo watched them crush the first hot Internet company, Netscape. It was reasonable to worry that if they tried to be the next Netscape, they'd suffer the same fate. How were they to know that Netscape would turn out to be Microsoft's last victim?..."...several times the power Google has now, but way meaner" - yes, that's about right. In those days there was a trade press, and any rag that crossed Microsoft died.
Even now I find myself imagining Microsoft will rise from the dead and again crush the innovation from the tech industry. It's an irrational fear, but it's common in my generation. There's nothing today to compare to Microsoft 1994. Neither Apple nor Google has anywhere near the power they had then.
Graham claims Yahoo's other great mistake was to treat its geeks badly. I think if you substitute the word "Creatives" for geeks it's a true statement for many industries. Creatives can be a pain to manage. They're always trying to work around things they don't like. Most companies pay them much less than senior managers. I can understand why that happens -- but it's a mistake.
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