Friday, February 1, 2008

Microsoft and Yahoo!s post-acquisition cultures

This is what I thought of immediately "MSFT is going to crumble, this is doomed to be a horrific merger."

Let's see if it gets accepted, and then makes it past anti-trust questions. And THEN, let's see what MSFT does. My vote, fire a lot of Yahoos (ha ha) and keep the technology. This will be an "assimilate or die" type of a process.


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via WeBreakStuff by Fred Oliveira on 2/1/08

And so it happens - Microsoft bid to buy Yahoo for 44.6 billion dollars this morning at $31 dollars a share (considerably above yesterday’s closing price for Y! stock). But this is not a post about economics but innovation, company mindset and culture. Microsoft and Yahoo are two very different companies - and having visited both their headquarters in the past in Redmond and California, it is hard for me to imagine how things will evolve if the deal goes through.

Microsoft is a huge company, with a culture that’s very different from Y!s. It offers products that fit into a very traditional mindset, whereas Yahoo was trying to change from that into a culture based on innovation, more in touch with its hacker roots. The Yahoo Brickhouse effort (which I’m a huge fan of) in particular, was a great example of that shift.

How companies react to mergers, acquisitions and new additions to teams has been one of my interests for a while. In theory, diversity fuels innovation because each company will have it’s own set of practices and answers to problems. This fuels discussion and hopefully the emmergence of a new set of signature practices on the new - and definitely more purple - Microsoft. This is quite likely a good thing for them.

What I wonder about though, is how some of the people now at Yahoo - who don’t particularly enjoy the Microsoft mindset - will react to this piece of news. Or how the stockholders will react. I guess we’ll see, but it’ll be an interesting next few days.

If you want to read up on the news of the acquisition bid, check the press release, the coverage at Techcrunch, or Techmeme, that will likely be on fire today.


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