Friday, February 01, 2008

Does 1 Web 1.0 company + 1 Web 1.0 Company = a Web 2.0 Company?

This isn't a look at a controversial social web business model, nor is it a look at a successful web 2.0 company. But I think it is huge news in the web business: Microsoft has offered to buy Yahoo. Both companies have been struggling lately and from my reading, it appears that Microsoft thinks a combined company will provide a strong competitor to Google in the online advertising business. I tend to like reading Paul Kedrosky's analysis on these topics and he says that it really may not make much of a difference. Combing two failing web 1.0 companies won't create a company able to compete against a web 2.0 company. In fact, in a later post he mentions that Google would be able to exploit this to grow its market share. As someone who has been through one corporate merger and will likely be going through another one in the next six months, productivity suffers greatly during mergers. 

1 comment:

Justin said...

The recent bid by Microsoft for Yahoo doesn't surprise me too much. Considering among other things that Microsoft hired former head of Yahoo R&D Gary Flake to run Live Labs.