Since the news of the MS offer for Yahoo, I felt a lot of enthusiasm around me. People were talking of technology, of tools, of stocks and bottom line (of course…). It seems like “something wonderful” was happening.
I’m far from sharing this opinion.
Ok, according to numbers, to products, this may sound great. But what matters is creating value in the future, and that’s not only a matter of numbers you just add. It’s also a matter of people, those who innovate, those who make software, those who give their best to their company. Although this new couple represents lots of money and lots of (sometimes) complementary products, the question is to know if they’ll be able to create, in the future, as much ore more value as when they were single.
Answering this question is not a matter of technology or available cash : it’s a matter of people. What makes people give their best ? It’s because they’re highly engaged, share a vision, feel like being a part of something, feel comfortable in a corporate culture.
So the question is : can MS and Yahoo’s culture mix together ?
I’m not sure the pure “Yahooees” will get into MS culture. I also believe that, if they get too close to yahoo’s culture, Microsft may loose its fundamentals. A strong alignment on one culture or the other may bring a lot of skilled people, perhapas the most engaged, the stronger believer, those who often make the difference, to the point of disengagement. Bulding an “half way” culture may cause the birth of a company that won’t be either MS or Yahoo…but something new, without strong crediential, no defined mission statement, or an identity people won’t share. You may say “we’re gonna change what we are”, but you can’t force people to follow you.
I don’t even mention MS people who’ll think : “but we could do the same as Yahoo but it was not our company’s culture…why buy them since we can make the same ? MS doesn’t believe in us ?”.
Another option is “not to change anything”. But it’s a nonsense.
Whatever the choice will be (MS,Yahoo, Miahoo), it will exclude people that are far from the new “center of gravity” that will be chosen. And the risk is big that those people will be the pilars of each company’s culture and products. And building a new culture is useless if it’s an negociated half-way culture, without strong beliefs in what the company is, what people share. The only thing you can get is a wandering boat without destination.
Perhaps the big winner is already Google. As MS-Yahoo’s culture will change, they’ll loose people. They will also loose users that don’t want their favorite to collude with the enemy. How many flickr users would like to become MS-photo users ? Do you want MS to know your delicious bookmarks ? Google may take benefits from all that by getting users from Yahoo and talents from both Yahoo and MS.
70% mergers destroy value…because merging is also a matter of people and corporate culture. I’m not sure MS-Yahoo will be a part of the others 30%.
