Culture Of Worry Guides Microsoft In Yahoo Bid

By Ramesh Ramanathan

While Google has smart search tools, everyone else does too, suggesting that Google has become the power that it is largely because it has become a brand, like Nike.

Its name is easy and fun to say, and works as both a noun and verb. Its home page is calm and clean, and its rainbow logo somehow manages to simultaneously convey both tie-dyed earnestness and high-tech savvy.

Microsoft has never been particularly good at this sort of brand management. Its advertising, for instance, has always seemed generic and unmemorable, the sort of thing you would expect from marketing committees sitting around looking at PowerPoint slides.

Which is one of the reasons it’s hard to understand how Microsoft’s Google forays will be any different with Yahoo under its roof than (before).

What exactly is Microsoft going to do? Hire more engineers? They are hardly in short supply now. Expand its data centres? That’s putting the cart before the horse. Execute a strategy better? When it comes to success in the search business, Microsoft hasn’t exactly written the book.

The usual observation about mergers—that you don’t automatically get one market leader by combing two market laggards—seems true in this case.

However doubtful it is that Microsoft’s anti-Google offensive will actually work, Redmond’s bid for Yahoo is a reminder of why the company is one of capitalism’s greatest success stories. Bill Gates, Steve Ballmer and their crew can always be counted on to worry about the portion of the glass that is one-fourth empty.

Two weeks ago, Microsoft issued the sort of quarterly report usually seen of a company in finest mettle. Redmond’s sales were up 15 percent and profit double that, excluding certain deferrals. And the rest of the year, it projected, would be just as sanguine—certainly unlike in the economy as a whole.

Elsewhere, that would be a mandate for staying the course. In Redmond, though, they were crossing off days on their calendars, waiting until Friday, the first day of February and thus the first opportunity Microsoft would be able to truthfully state, “Okay, Yahoo, it’s been a year since we talked to you guys; where’s the beef?”

Source - Mint