February 5, 2008

Microsoft, Yahoo, and innovation

Bill Burnham argues that a Microsoft/Yahoo merger would drive down M&A prices. Marc Andreesen disagrees. His argument is essentially twofold:

  1. Microsoft and Yahoo were never more than a small part of the exit opportunity anyway.
  2. A merged Microsoft/Yahoo will be so slow-moving it will create more opportunities for competition than it destroys.

Andreesen certainly knows about slow-moving behemoths making wasted acquisitions; Netscape was acquired by two companies (AOL and Sun) that both dribbled away the parts they respectively acquired.* However, I think he and a lot of other observers are missing something this time — the Microsoft/Yahoo synergies are too large to ignore.

*The legalities of the merger were a lot more complicated than that, but in essence AOL got the “internet” piece of Netscape and Sun got the enterprise side.

Given the opportunity, here are some reasons I think integration would go a lot better than most people think:

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One Response to “Microsoft, Yahoo, and innovation”

  1. Text Technologies»Blog Archive » 19 Microsoft/Yahoo synergies that could revolutionize the Internet on February 8th, 2008 12:07 pm

    [...] Edit:  Follow-up re: implementation. [...]

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