Motley Fool: Microsoft’s Yen for Yahoo! Damaged Both Companies

February 19th, 2008 at 2:00 PM - News by John Martellaro

Speaking to the proposed acquisition of Yahoo! by Microsoft and a possible hostile takeover, the damage to both companies has already been done, according to The Motley Fool on Tuesday. The winner is Google.

The specter of being taken over by Microsoft, according to Anders Bylund, has so many Yahoo! employees spooked that a brain drain has started and key people are leaving. Resumes by all are being frantically updated.

"There are plenty of talented engineers, managers, executives, and so forth on the Yahoo! side who would rather seek their fortunes elsewhere than be subjugated to Mr. Softy," the author wrote. "Years of borderline abusive business practices -- or even the appearance thereof -- will do that to a hopeful buyer every time, especially when the target is a notoriously happy-go-lucky free spirit. Jerry Yangis official title is "CEO and Chief Yahoo!," and there is no such whimsy in Microsoftis executive suites.

Microsoft is being affected as well.

"The powerful Yahoo! brand name will remain, and so will the various Web properties that make the company tick today. You got Yahoo!is present, Steve. Congratulations. But the future is leaving, or already gone," Mr. Bylund noted. "And the cream of your own online talent is leaving, too. The idea was "two No. 2s make a No. 1." The whole will indeed be a lot less than the sum of the parts, but not the way you imagined. Itis the value of the combined operation that is going down the tubes."

The damage has been done to both companies. The bottom line was, "Google won," the author concluded. "Itis too late to apologize."