Microsoft has “pulled an Oracle”. In a surprise move, Microsoft made a $45 billion hostile takeover bid for Yahoo!. Microsoft is threatening a “sledgehammer tactic” of ousting most boardroom members within six weeks unless Yahoo! accepts the offer. The move came after Yahoo! has suffered eight consecutive quarters of falling profits and shrinking market share. This Yahoo! move which follows a recent announcement to acquire FAST don’t follow Microsoft’s standard play book, they look more like the acquisition strategy that Oracle has been pursuing.
If the deal goes through, what would it mean? There’s plenty of speculation.
Google says there are “troubling questions” and suggests that the deal wouldn’t be good for the consumer and would lead to Microsoft extending it’s PC monopoly onto the Internet. Eric Krapf suggests that this might push Google to think of its own mega-merger, something like Google-Cisco.
Matt Assay of Alfresco wonders what the implications are for Open Source, a direction that Yahoo! has been supporting, but one Microsoft has long stayed clear from. He thinks that the tie-up would give Microsoft a chance to “reverse course on its open-source antipathy and embrace it — at least in the context of the Web”.
Forbes speculates that a big push behind the deal is Microsoft’s desire to get a bigger foothold in the mobile space. “On their own, Microsoft and Yahoo! have hardly had game-changing mobile visions. Yahoo! has the consumer-facing side of mobile Web services while Microsoft has poured considerable effort into the guts, with its Windows Mobile operating system. Together, those assets neatly complement one another.”
Microsoft and Yahoo! are now both struggling against Google in the Internet search engine and on-line advertising space. Google is way in the lead and is pulling even further ahead as it acquires DoubleClick.
If Microsoft can push the Yahoo! deal though and execute well, the acquisition could be a game-changer and a huge blow to Google. But that’s a lot of ifs and Microsoft has stumbled quite a few times in the past.
