The Power of Two?
What will come of the Microsoft/Yahoo combination? Lost in their strategies is the reality that business combinations are multiplicative not additive. So to see what falls out we simply need to come up with a factor for each piece and multiply.
Microsoft — the glory days are over and not coming back. Low innovation, but huge presence and distribution. — Give ‘em .8 (of Apple)
Yahoo — totally a legacy company with sinking relevance. Email and Flickr are nice, but is there really anything else? Couple this to a long chain of clueless management and I’ll give them a .3 (of Google)
So .8 x .3 = .24. — that’s 1/4 in my book. Must be something canonical here, because two half a loaf companies definitely feel like 1/4 a loaf. It’s not the steel industry Mr. Balmer. — don’t tell me about economies of scale. Bill Gates has got to be thinking “Let these guys run it for a couple of months and they fly it into a mountain.”
MicroWho?