Playing Armchair CEO · 4 February, 10:51 AM
Dare asks what I’d do as head of MS which is a fair question. Bearing in mind that there’s a very good reason I’m NOT head of MS, I suppose the obvious answer is “build a better product”, but naturally, that’s easier said than done, and MS has a long history of trying to do just that. MS must think they’re buying something, as $44 bn isn’t peanuts, even to a company that could probably find a way to pay cash for the purchase. (Didn’t MS used to have that much cash in the bank? Now they’re at $19bn according to their last financials. That’s a bit concerning).
I posted about this a couple days ago, but what I’m wondering is what MS gets out of this. Yahoo has nice products, but MS has search, IM, (consumer) email, social networking (via Spaces)… I think that covers the big areas. Yahoo has eyeballs, but does MS really need to spend $44 bn to get them? It seems obvious that eyeballs are a pretty worthless commodity – if Friendster, MySpace, and Facebook have proven anything, it’s that those eyeballs have little loyalty. Yahoo! and MS both have problems with generating ad revenue, how will a collaboration help that? Maybe Yahoo knows how to do this but can’t put a market together. MS is good at marketing, maybe this works?
So maybe MS is buying talent. I’ll tell you what, as an employee, I never like to be acquired. I’ve been through it a bunch of times and it’s never very pleasant. Given the differing cultures at Yahoo! and MS, the radically different technologies being employed, and the plain fact that when faced with a merger, much of Yahoo’s workforce will move on at the first opportunity, they’re not buying employees either. There must be something else that MS sees in this deal that I’m not.
— Gordon Weakliem
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