Cafe Witness

Sunday, May 06, 2007

Thoughts on MicroHoo!

While discussing the potential Microsoft / Yahoo! merger on Friday, David Armano referred to the hybrid as MicroHoo! Catchy as it is, the commenters on his blog had some of the day's best insights, including - from Madhu:
This is what losing companies do. I think it would become -

MicroWho ??

From Andy Didyk:
You've got two giants of companies that both try to do everything for everyone; in other words, they are both specialists at being generalists instead of two specialists combining to become a generalist. I foresee this working well for both companies, and a natural response to Google's policy of "Invent everything useful on the web, and buy out what others have already invented."

And from Paul McEnany:
Well, i love the idea that one slow company + another slow company somehow has a greater chance to beat one innovative one.

My Two Cents

Watching massive companies merge is almost always a good thing -- for the little guy.

As McEnany mentions, massive companies cannot move quickly. They cannot innovate swiftly. They must rely on scavenging the ideas from the smaller, quicker, more nimble competition. Imagine a Tyrannosaurus Rex with a firewire port.

Smashing two of these companies together may be wonderful in terms of available in-house resources, but all it really means is that it'll take this ship twice as long to turn around or adjust on the fly. Sure, there will be a trimming of fat from both companies, but the overall increase in people mass will only make them go THAT MUCH MORE UNSTOPPABLY in one direction.

And this leaves room for all kinds of small and mid-sized competitors to thrive in their shadow.

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