Microsoft's attempt to acquire Yahoo is expensive, but there could be a significant other expense for the software maker: retention bonuses.
Microsoft Chief Executive Steve Ballmer publicly discussed these payments to keep Yahoo employees from leaving, saying that "we intend to offer significant retention packages to your engineers, key leaders, and employees across all disciplines." But The New York Times on Wednesday dug out a number that puts the retention bonus factor into perspective.
Specifically, the paper said Microsoft's acquisition of Tellme Networks, a deal valued at about $800 million, was supplemented by a further $100 million to retain employees.
There are major cultural and technology differences between Yahoo and Microsoft that would complicate integration and make retention bonuses more necessary. But Tellme Networks Chief Executive Mike McCue said Ballmer had become sensitive to at least one technology aspect of integration.
When McCue asked whether Tellme would have to move its software from Sun Microsystems' Solaris version of Unix to Windows, Ballmer replied, "No, no, we've learned our lesson," McCue recounted to the Times. That could be a reference to the long and arduous transition of Hotmail from FreeBSD Unix to Windows after Microsoft acquired the e-mail service.
That could be music to Yahoo ears, since the company uses open-source software extensively rather than Microsoft's products.
Microsoft said Thursday it has closed its deal to buy voice recognition specialist Tellme Networks.
Tellme CEO Mike McCue remains at Microsoft as head of that unit, working with Zig Serafin, who is the general manager of Microsoft's Unified Communications Group. The company, which reports into Jeff Raikes' business software unit, is remaining in its Mountain View, Calif., headquarters. Mountain View is also home to Microsoft's existing Silicon Valley offices.
Microsoft announced its plans to buy Tellme back in March, following months of negotiations and rumors and reports that a deal was near.
The deal could help Microsoft in a variety of areas, including mobile search, telephony and call center software. The fact that Tellme sells itself as a service, getting paid for each call its servers handle, as opposed to just selling software also may aid Microsoft in its efforts to expand into new business models.
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