Big mergers in the high-tech industry have been colossal failures, and the same can be expected of Microsoft and Yahoo. Steve Ballmer, who appears to be anxious to make his mark on his company should stop trying to be all things to all people, according to Arik Heseldahl at BusinessWeek on Friday. Instead, Microsoft should focus, like the other Steve. The one whois killing Microsoft in the smartphone business.
In an open letter to Steve Ballmer at Microsoft, Mr. Hesseldahl was particularly crisp and direct in his criticism of Microsoftis proposal to buy Yahoo.
"After all, who knows what will happen to the Internet while youire busy splicing these companies together," Mr. Hesseldahl wrote. "Name one truly important Internet innovation that has come internally from either Microsoft or Yahoo. I canit either. All the best new stuff at Yahoo has come by way of acquisitions: Flickr, Oddpost, Zimbra, and Overture."
Mr. Hesseldahl pointed out that, in addition to the expected difficulties in the acquisition and Microsoftis sprawling growth, other things have been left unattended, like Vista and a Web-based office suite. Instead, Microsoft has dabbled as a consumer electronics company, a digital media company, and with Yahoo in its sights, an online advertising company. "Before long youill probably want to sell me telephone and TV service, too," Mr. Hesseldahl wrote with only a little hyperbole.
The round house punch, however, came when the noted BW author compared Steve Ballmeris lack of focus to the laser-like focus of the other Steve down south. "You know, the turtle-necked guy in California who keeps annoying you by selling iPods and computers that typically donit run on Windows. You could learn a lot from him. Focus saved his company from oblivion. Apple does what itis good at, and it expands into new areas carefully," Mr. Hesseldahl explained.
This is the very best explanation of what ails Microsoft in 2008 published to date. After reading it, one has to wonder why Microsoft, as Mr. Hesseldahl pointed out, with a server, OS, and Office business that generates a $43B revenue with a 62 percent operating profit, seems so bent on self destruction.