Stick to what you know or land-grab the future? (Microsoft and Yahoo)

This weekend's NY Times article "Maybe Microsoft Should Stalk Different Prey" raises the point that perhaps Microsoft should reconsider the Yahoo acquisition to focus on what it knows, which is enterprise software.

New CNET Editor-in-Chief Dan Farber raises a different point in a post today--that there is still time for an internet land-grab and Microsoft should take this opportunity to nab Yahoo before it's too late.

Overall, I don't see the Yahoo acquisition paying immediate dividends. In fact, it's hard to see when it would pay off. Microsoft doesn't have the machine in place that would allow for a smooth transition with quick gains. There are a few companies, Oracle and Cisco, notably who are fantastic at acquisitions, but Microsoft hasn't yet built an effective acquisition engine.

There is another argument that says that internet is really not Microsoft's ball of wax, and instead the company should try to acquire SAP in more of an Oracle-style of leveraging assets across the same customer base. Unfortunately, that argument doesn't fly as it seems that Microsoft has finally realized there is a very real danger of losing the corporate desktop as it moves online.

[gtewallace]

It's an interesting contrast. Oracle has acquired its way to a commanding presence in proprietary enterprise apps, but is that the past or the future of enterprise technology? I'd say it's the past. Microsoft's angle seems to be to skate where the puck is going, which will undoubtedly be harder to pull off, but if successful will position them better for the next decade. And, even though Yahoo! will be their biggest test, Microsoft is already well down the Internet/Media path with aQuantive and many others (see list on Wikipedia: http://en.wikipedia.org/wiki/List_of_companies_acquired_by_Microsoft_Corporation#2007)

[johnedlt]

My graduate school hosted an IT forum where a Microsoft executive was asked about the merger. He went on to say how mature and ready Microsoft would be for a smooth integration in abstract terms and could not answer me as to what advantage the merger will create for the company since it was still under wraps and in fact preemptive.

I too dont see any advantage in the foreseeable future from this merger. So far the reason Gates mentioned about engineering talent and others ive read about leveraging internet assets are quite lame and unconvincing.

I wonder how the two regressing internet brands (think product life/ cycles) can synergize to become more appealing again. if they were to re-brand completely as a converged entity thats a diff story altogether and may still arouse fresh interest.

I would compare it to the HP-compaq merger which did not really work for so many years.

[johnedlt]

btw, i just wonder why google seems to be really reacting by claiming potential anti-trust from the merger. is it just desktop OS bundling again or can they see something we dont?