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Microsoft's bid for Yahoo

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There's an interesting story in today's New York Times about the anti-acquisition stigma in Silicon Valley. Many people believe that buying a company is "a confession that there's a failure to innovate," says Oracle's Larry Ellison, as quoted in the NYT. But that's starting to change. Oracle bucked the conventional wisdom with hostile bids for PeopleSoft and BEA Systems. Microsoft is now trying to do it with its bid for Yahoo.

But is this bid a good move for Microsoft? Or should Steve Ballmer heed the anti-acquisition voices? I can't really see how buying a second-rate search engine is going to help Microsoft compete with Google. For Microsoft, this clearly is a confession of a failure to innovate. Neither company has managed to beat Google on its own. But why would merging help? It's a major challenge just to integrate two small companies after a merger (you can read our story about it here.) For companies the size of Microsoft and Yahoo, it's a colossal challenge--and maybe a colossal mistake.

What do you think about Microsoft's hostile bid for Yahoo?

Last updated: Mar 11, 2008




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