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May 04, 2007

Comments

Victor Cook

Daniel,

Thank you for your comments. I agree with your concern about a corporate culture clash. In fact, I'd bet their corporate cultures are behind the "cost per dollar" problem faced by both companies. A merger likely would just magnify the underlying culture issues.

You might be interested in the financial accounting dimensions of these problems. I review them in my audio slide show on "Enterprise Marketing Expenses." See http://breeze.tulane.edu/cookchapterfour/

~V

Daniel A.

I agree whole-heartedly with your analysis. The fact that Microsoft and Yahoo's leadership would even entertain combining resources, for a number #2 position in search, shows how misguided these enterprises are.

Yahoo has had a somewhat successful run with integrating media into their web offerings. Microsoft has done a poorer job of integrating any technology--even those directly aped from competitors--into their Windows/Office platform.

Additionally, the problem of corporate culture clash is very real. Opposing viewpoints and resistance to change have been the death-knell for mergers that were of much more obvious potential: AOL-TimeWarner, MCI-Worldcom, Daimler-Chrylser. Ask anyone that worked for those companies and they will tell you that these "mergers" never truly happened. The ballyhooed synergies were lost to protracted wars of corporate infighting and reorganizations. Yahoo-Microsoft would be as bad, if not worse.

This is a terrible deal for both consumers and investors. An idea best forgotten.

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