Microsoft’s Online Strategy: A Yahoo Acquisition
February 1st, 2008 | Categories: acquisitions, networks, social media, strategy
We’ve heard the rumours for months years. Enter… today. In an incredible turn of events (well, not really), a Microsoft-Yahoo acquisition may actually be in the works. To some, this is huge news. To the rest of us, it was only a matter of time.
Undoubtedly, Google is king in the online world. Yahoo is scared. Microsoft is scared. Now, they can be less scared, together. Both are lost with respect to their online strategies. 
Yahoo re-hired Jerry Yang in attempt to revolutionize the company. This never came to fruition. As for Microsoft, the Redmond-giant has always been lagging behind Google and Yahoo when it comes to online strategy. The software heavyweight is best known for arriving at the party too late and over-paying for mediocre properties. By joining forces, I think that Microsoft, in particular, is hoping that everything just ‘works out’ and everything falls into place. Unlikely.
Obviously synergies will exist. Costs can be cut and economies of scale can be leveraged. This will likely cause an HR nightmare, but business is business. If either wants to have a chance at Google, this may be their best option. This may be the last hurrah.
Microsoft stands to gain most from Yahoo’s search engine and ad platform. These are two areas where Microsoft has continually been playing catch-up and has never seemed to get a strong grasp on the market. That said, Yahoo is lagging behind Google in these areas in a big way as well. Another area where Microsoft stands to gain from Yahoo is with respect to brand. Yahoo drives a lot of revenues via its services. This is largely in part to excellent branding.
My biggest concern is whether current Yahoo employees will want to work for the sloth-like, monolith we know as Microsoft. My guess is that the cultures vary greatly and that post-acquisition syndrome may take effect.
For more news on the acquisition, check out:
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Read/WriteWeb: Microhoo! What Does it Mean for Users?
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Center Networks: Microsoft Wants To Acquire Yahoo; More Yahoos To Lose Jobs