Just like two wrongs don’t make a right… two losers don’t make a winner!
In relatively current news Microsoft has pursued expanding its empire, issuing an unsolicited $44.6 billion takeover offer for Yahoo. While Yahoo seems to be genuinely mulling over the offer, they are hoping to increase the offer price from the current $31 a share to upwards of $40 a share.
While I think that neither Microsoft or Yahoo are losers, I think that a acquisition is a bad idea for the simple reason that the corporate culture of both companies couldn’t be further from one another. One could even argue that the brands project more of a “ying and yang” feeling off each other than a “let’s be attached at the hip” kind of attitude.
If the Microsoft-Yahoo acquisition does happen, what should you expect to see? For starters, a new name for Yahoo is likely. I wouldn’t be surprised to see Yahoo! renamed Micro-Hoo! or MS Yahoo (Much like that of Microsoft owned MSN and MSNBC).
When companies merge (either mutual or hostel) the brands need to mesh together well with like ideals, styles, cultures, and visions. A classic example of an acquisition/merger gone wrong is Sears and Kmart. Their #1 issue is that what is in the best interest of Sears is not necessarily in the best interest of Kmart, and vice versa. Another perfect example is Sprint and Nextel. In their case the problems are both different cultures and different wireless technology. And let us not forget the Compaq and Digital Equipment Corporation (DEC) acquisition. Compaq, the world’s largest PC firm, seemed to want to give IBM a run for their money. But, in the classic example of biting off more than you can chew the result of the acquisition (or merger) was less than successful.
Think about it this way… when two companies merge that are big competitors, it’s like sticking a group of Yankee fan and a group of Red Socks fans into a sports bar and expecting them not to brawl. The rivalry mindset can’t be turned off like a switch. Expecting the different groups of people to successfully collaborate usually isn’t realistic.
A Microsoft-Yahoo acquisition (or merger) will almost certainly have a fall-out including:
§ Rebranding crisis
o All of Yahoo’s technology will have to be moved under Microsoft’s label
§ Massive layoffs of Yahoo employees
§ Hotmail style transition of Yahoo’s systems to a Window’s powered infrastructure
It’s my crystal ball prediction; if a Microsoft-Yahoo acquisition (or merger) is completed then they’ll ultimately be atop the list of acquisitions (or mergers)-gone-bad. The exec should take my advice, for whatever it’s worth, and go it along.
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Product |
Yahoo |
Microsoft |
Search |
IBM OmniFind Yahoo Edition |
Search Server 2008 Express |
Web Hosting |
Small Business Web Hosting |
Office Live Small Business (SB) |
E-Commerce |
Small Business Merchant Solutions |
Office Live SB, Commerce Server |
Small Business Email |
Office Live SB, Exchange | |
Search marketing |
Small Business Search Marketing |
Office Live SB, AdManager, aQuantive |
Internet Access |
AT&T Yahoo High Speed Internet |
None |
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