Ray Ozzie Speaks to Yahoo
Monday, March 10, 2008 at 08:31AM
Vikram Somaya in M&A, Online Media

An interesting, thought not entirely unexpected article from MSFT via FT this morning:

"Microsoft would not rush to merge its technology platform with Yahoo's after a takeover of the internet company, even if meant delaying some of the potential benefits to shareholders from any deal, says Microsoft's chief software architect.

"Technology companies, if they dive in and just smash things together for smashing them together's sake, it's reckless, it's just simply reckless," said Ray Ozzie, who took on the company's top software technology role from Bill Gates in 2006.

His comments, made in an interview last week, highlight the technological difficulties Microsoft would face if it succeeded with its unsolicited takeover, worth $41.4bn.

"They have a number of different types of technologies. They have their own corporate culture," Mr Ozzie said."

 Therein lies the rub. If MSFT is to recoup its investment within two years, it needs to do what MSFT does, which is to rip through the Yahoo technology stack, discard the competitors and find out where they can loft out Yahoo code and square peg in the germane MSFT technology. This is certainly what the bean-counters would prefer and MSFT has had mixed success in managing this through much smaller acquisitions.

ray.jpgI have to give Mr. Ozzie credit for going public with his stance. That last quote was certainly directed at the lemmings that are rushing for the Yahoo cliff to head out into the wide world of technology outside of MSFT/Yahoo. In order to retain the talent that is looking at this deal with rather jaundiced eyes, MSFT needed to make a public appeal to them and who better to do it than Bill Gates' anointed Software Guru?

It remains to be seen whether this will have any real effect on the old guard at Yahoo and whether they will see this as  a meaningful statement or another sop to getting the deal done.  If it is indeed meant as written, Mr. Ozzie is certainly going to have to fight a two-front war against the Yahoo insurgents and his very own Corporate Development team. Not a particularly enviable task but one that I, for one, would certainly applaud.

Article originally appeared on Vikram Somaya (http://www.somaya.com/).
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