I have; like most folks in the tech blogosphere, been following the growing mess that is surrounding the whole Microsoft – Yahoo purchase/merger/acquisition. While it seems that a lot of bloggers are cheering on the bold (?) move by Yahoo to turn down the $44Billion dollar offer that Microsoft put on the table Robert Scoble in his typical fashion thinks that Yahoo has made a mistake.
For the most part though I have let the whole thing slide by because as far as I am concerned the idea of Microsoft buying up Yahoo is borderline lunacy that only shows how wrapped up we have become in the almighty advertising dollar. It is as if software is no longer driving the computer industry other than a way to provide fresh fodder for all those ad networks out there.
The other thing that really concerned me was the inevitable problems that would arise when you go about meshing two totally divergent corporate philosophies and workforces. For that I was waiting for Mini-Microsoft to have his say because I couldn’t see an event like this go by without his thoughts on the whole thing.
And not being one to fail M-M today posted his look at what is going on. While he does talk a bit about the whole advertising angle he also mentions his confusion over what was said by Ballmer in the past and what is being said now about buying Yahoo:
I was on the internal Microsoftie bandwagon that Steve Ballmer was steering not too long ago that an acquisition of Yahoo! didn’t make sense for Microsoft. So when the unsolicited offer went through, I was like a whole bunch of other confused senior people looking around trying to figure out what changed and why this suddenly was the right thing to do and to bet the company on.
As both hoped for and expected was his take on the hit that Microsoft would take trying to absorb (save the Borg jokes – they were old days after first said) 14,000 or so new employees. While he points out that even with the addition of all these new people the purchase of Yahoo isn’t bringing anything to the table to correct screwed up offerings by either company
Microsoft absorbing Yahoo! doesn’t make sense to me given the extreme overlap in offerings that neither Microsoft nor Yahoo! have been terribly effective at. How many success stories have there been lately at Yahoo!? I like their portal. I use their search on occasion (only when Live Search and Google give me disappointing results). And their acquisition of flickr was really good for them, along with not screwing flickr up (and flickr users, you gotta know Microsoft would be pretty hands-off of flickr, other than probably putting a Live ID sign-in bar or such on there).
Additionally he raises a point that I haven’t seen mentioned anywhere else. That being that in the divisions where the two companies overlap the Microsoft divisions shouldn’t be feeling to safe and secure because as he says those folks are under just as much scrutiny as the Yahoo offerings
And the MSN, search, and ads folk at Microsoft certainly shouldn’t be too proud right now, because you guys are under as much scrutiny as Yahoo!. Why are we proposing blowing $22,000,000,000USD in cash and going into debt? Because Yahoo! has something done right – relative to us, according to our leadership – that you haven’t been able to do. Is there a Microsoft online-services leadership shake-up coming? One can hope. The fact that we’ve initiated this acquisition, for whatever reason, means that the people in charge haven’t been able to deliver and are not on a path to deliver. Accountability?
Personally I think Microsoft should walk – if not run – away from the deal now that they have the chance – take that money that was on the table and really fix the in-house problems they have. If that means a massive shake up (firings etc) in those areas that they hoped the Yahoo deal would fix then get to it. Adding to one’s headache by buying a company that is flailing about looking for an identity in a sea of peanut butter isn’t going to fix your problems.
As it stands this deal is nothing more than Ballmer’s swan song for his entry into the computer history books but it is a swan song that could turn into an albatross cry around the neck of a company that is having its own identity problems.