In thinking about the proposed Microsoft-Yahoo deal, I wonder how merging two bureaucracies, both struggling with strategy and execution issues, is good for anyone (other than Yahoo’s shareholders, who will receive $31/share in the transaction)? Forget about antitrust concerns, and the high likelihood that at least the EU will scrutinize this deal with a full proctological exam. Most see this deal eventually going through. Is this a new powerhouse in the making? Is anyone at Google losing sleep over the prospects of a Microsoft-Yahoo juggernaut? No doubt Google will object, simply because Microsoft objected to its DoubleClick deal. Nevertheless, I suspect few are losing sleep tonight, at least few at Google, at every Yahoo shareholder’s house and at Microsoft’s deal architects in Redmond, who needn’t worry about a rival bidder. Come to think of it, everyone should sleep well tonight, except Microsoft’s shareholders. Because if this deal is consummated, it will clearly rival the AOL-Time Warner merger as the biggest corporate trainwreck of the last decade. Do mergers solve the kind of problems Microsoft and Yahoo face? More often than not, they amplify and exacerbate them!
FULL DISCLOSURE: I am not a shareholder in any of the above companies mentioned. I am a disgruntled Microsoft customer, having just uninstalled Vista 64 and “dumbed down” my desktop back to Windows XP at considerable and unnecessary expense.
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