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    • Yahoo, Microsoft, AOL and News Corp. Mix it Up [view article]
      While teaming up with AOL may help posture against Microsoft's move to gobble up Yahoo, this actually may be a week move. The argument that AOL has access to mounds of content through its parent, Time Warner, may sound great, but reality may not allow that argument hold water. AOL, just like the other segments in the TW conglomerate are separate business entities, each owning and managing their own content. The executives at AOL may be making a deal with Yahoo - but in order to get access to the wonderful TW content, Yahoo needs to build relationships with Time, Money, Fortune, etc. Case in point, Sports Illustrated, a TW publication, has made content agreements in the past with Yahoo post AOL merger.

      This brings up a good point – I have not seen much talk about how successful a merger would be between Yahoo and Microsoft. AOL/ TW failed primarily because of a complete lack of synergy between the two businesses. Not to mention people at AOL were too snobby to the other businesses within Time Warner (Oh! We are the future of content delivery – give us your content and let your print business die – our way is better – it is the future).

      Microsoft has never absorbed a business the size of Yahoo; it is used to buying smaller software companies that were formed specifically to be purchased by a larger player. My concern is that the acquisition-modus-oper... (absorb and assimilate) at Microsoft may not be the best for a deal of this size. Microsofts's largest deal was aQuantive for 6bil, an overzealous deal in my book and an overpriced one as well, bringing on 2106 employees. The Yahoo deal is almost seven times larger in both respects ($40bil, 14k employees). Microsoft may not be able to absorb such a large size. Yahoo’s operations, with offices in 32 countries, are also much more disparate than aQuantive’s, which had operations primarily in the US. This goes beyond the logistics involved with managing all of the change management aspects, it will mean big shifts in sales strategies, operations, and R&D as well. Microsoft tends to be US focused, developing products in the US and then merely changing the menu language when pushing out to the rest of the world. Yahoo’s success is primarily from building operations and services that are relevant to localities. “Absorb and assimilate” will destroy Yahoo and simply make Microsoft bigger, not necessarily better.
      Apr 11 02:01 PM
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