I had the pleasure of working with MIT’s Michael Cusumano when I was at Business Objects in Paris in the late 1990s. At the time, he’d just published Microsoft Secrets and we’d hired him to help with defining and improving our software development process.
So I was happy to see he was the force behind the idea that Microsoft is perhaps stalking the wrong prey in this recent New York Times article. Excerpts:
Michael A. Cusumano, who has written several books about the software industry and about Microsoft, is not impressed with Microsoft’s rationale for its Yahoo offer. He said the bid seemed to be a pursuit of “an old-style Internet asset, in decline, and at a premium.”
If Microsoft thinks this is the right time to try a major acquisition on a scale it has never tried before, it should not pursue Yahoo. Rather, it should acquire another major player in business software, merging Microsoft’s strength with that of another. This is more likely to produce a happier outcome than yoking two ailing businesses, Yahoo’s and its own online offerings, and hoping for a miracle. […]
Professor Cusumano has a suggestion: Rather than acquire Yahoo, Microsoft should pursue SAP. […]
If Microsoft is to rededicate its attention to its most valuable assets, business customers, a prerequisite is dropping its ill-advised bid for Yahoo. And to find the best acquisition strategy, ask, “What would Larry do?”
If Microsoft tries to fight Google with wobbly legs, scared witless, it will lose.
Personally, I agree. Microsoft’s essence is a business software company. Given the choice between buying an ailing Internet company that (1) just had its butt kicked by Google and (2) never figured out what to do about it, or a powerhouse in business software to shore-up its position against a Google attack, I’d pick the latter any day.