A superb article on Wired.com on the Microsoft -Yahoo merger. The industry has appropriately termed it the MicroHOO! affair. Well this article looks at the future scenarios that could pan out and methinks this is an excellent insightful review on the pains of M & A between two industry giants with such an acrimonious history. Surely, this is a business school case study in the making (hehehe)
The various case scenarious have been aptly analyzed - what if a higher offer is made or a hostile takeover is done or if Microsoft walwaks away altogether and finally if Microsoft sticks to its half cash, half stock bid. the winners, losers and what would happen next have neatly analyzed.
My two cents on this whole issue:
1. Its going to be very painful. 2 big monoliths have never merged successfully and there are going to be tonnes of integration problems not to mention the basic cultural issue - silicon valley start up (Almost) meeting seatle software big daddy. ouch, it feels painful
2. The big winner in all this is going to be Google. Ironically, the big G is the reason why Microsoft made the offer
3. M & A's are successful only when there is very little overlap between the businneses of overlapping companies. MicroHOO! has way too much overlap and this could also pose a lot of painful issues on what products need to be jettisoned, thus leading to alot of internal strife. I wouldn't want to be in on a meeting between the product heads of MSN and Yahoo Messenger. Actually I would.
4. Microsoft has no choice but to go ahead with this merger if it ever hopes to steal a march from google and Yahoo has been in a limbo due to various internal issues. The basic issue - both Microsoft and Yahoo need each other but really cannot stand each other. If they merged, it would make for an entertaining Marriage.
5. And oh, lets not forget Microsoft's Anti-trust issues. With both of MicroHOO!'s instant messaging systems, email services, web portals, I bet the Justice department is rubbing its palms in glee (being egged on oh so subtly by Google) oh what fun!
6. Like I said before, The only person gaining out of this hooplah is Google. They'll get all the great, creative Yahoo folks due to mass exodus and all they had to do was stand on the sidelines!
I read somewhere, that inorder to stir things up a bit and raise Microsoft's hackles, Eric schmidt gave yahoo a call on how..er..may be they could work together on things. lol
Another good article on what makes for good M & A's here. M & A's work, as the article says, when both companies have unique but complimentary products on offer. That way the integration can be smooth and there is greater consolidation
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