Microsoft has placed an offer to buy Yahoo!. Some initial, mainly unsorted thoughts below:
- My first impression is that Microsoft is really despaired for not being able to catch up with Google on their own. How else can they justify a 62% premium over Yahoo’s stock price from Thursday night?
- $44.6 billion dollars is a whole lotta money.
- Microsoft and SAP AG once cancelled their plans for a merger because of the resulting complexity. Yahoo is significantly smaller than SAP (11.400 vs. ~40.000 employees) but still I wonder if Microsoft is capable of handling a nearly six-figure headcount with different cultural backgrounds properly. Quite a challenge for McKinsey, Accenture, Deloitte et al.
- What about the overlapping properties of both companies? Assuming the buy-out actually happens, will e.g. the search sites be merged? What about messaging? Free mail? Since the main reason for the offer is strengthening their position in the ad market, I doubt that Microsoft will change much regarding the other properties in the short term after the acquisition.
- Both companies have a diametrically opposed technological infrastructure regarding their web projects: Microsoft eats their own dog-food (Windows, ASP.NET, SQL Server, …) while Yahoo is built on top of FreeBSD, PHP, MySQL, Hadoop and things like that. (Remember how long it took Microsoft to port Hotmail from FreeBSD to Windows? But still it happened.)
- Judging from the outside there is a huge cultural difference between Microsoft and Yahoo. I don’t think they can be combined without pain.
- I’d love to be in Yahoo’s headquarter today. Or as Jeremy Zawodny puts it: “I predict that today will be one of our least productive days since 9/11 at work.”
- Today is a good day for Yahoo shareholders to make some quick money: At the time of writing this, the stock price has grown by 44%.