David Lentz

Microsoft, Yahoo! Merger Makes Sense

As a web professional, you should understand the difference between the Microsoft way of doing things and the Yahoo way. You should know that the tool sets and methodologies used to create the products are completely different, and that Microsoft ALWAYS pushes its assimilated companies to use the "corporate standard" tools and methods, and to melt and re-pour their products as the first order of business.

With Yahoo's Panama restructuring of their operation now (more or less) behind them, does it seem to you (as a web professional) that it would make sense to immediately re-do all that work upon being acquired by Microsoft? Because that is almost certainly what would transpire, and what has happened to every Microsoft acquisition.

And in doing this, taking the control and direction out of the hands of the assimilated companies, they have a very poor track record of successful preservation of whatever it was they acquired the companies for in the first place. Remember Hotmail?

And how about Bungie -- developer of Halo and Microsoft's crown jewel in it's computer gaming business sector? Wasn't one of the things that drove them to finally seek a separation from Microsoft the need to return to their own tools and do things their own way? Note that Microsoft was not the initiating party in the dissolution of their relationship with Bungie, as implied by your characterization of it as "spinning off Bungie Studios" -- it's more like Bungie Studios "broke free from Microsoft", as Bungie was the initiating entity of their separation.

People in the investment community tend to forget that there is something other than money involved in running a successful business.

As a "web professional", I don't suppose that there has ever been any business you have turned away from due to silly requirements like coding a web page delivery system in COBOL (or to choose something a bit less ridiculous, Ruby or Cocoa), or to implement it using Web Objects or WebSphere. You have a toolset that you tend to favor due to your own preferences and competencies.

Successful business mergers allow the acquired businesses to continue to operate using the tools and strategies that made them successful, and initially merge only at the strategic and financial levels. However, Microsoft does not now, nor has it ever, conducted its business in this manner.

Yes, looking at the strategic goals of Microsoft and Yahoo, it does make sense that they have a common direction and would work well together. But at Microsoft, "working well together" is not a part of the plan for acquired companies. Any independence of thought and action goes out the door when the ink is applied to the merger contracts.

When Microsoft changes its approach and tries to learn from its acquired businesses, perhaps we will see Microsoft begin to reclaim some of the lost glitter and glitz of its golden years. Otherwise we will see it continue to stagnate and decline in the face of competition that is blazing new trails rather than mining past glories.

People who look upon the strategic goals of two companies that do things in entirely different manners and think that a merger is just the ticket, since the companies' strategic goals are so well-aligned, often wind up seeing such mergers result in far less than the sum of the parts.