The Borg-Yahoo merger won’t work. Here’s why. It’s like taking the two guys who finished second and third in a 100-yard dash and tying their legs together and asking for a rematch, believing that now they’ll run faster.
Here’s the weird thing: I first heard that line about the 100-yard dash from Ballmer himself, maybe a decade ago.
See, the biggest mistake people make about Monkey Boy is thinking he’s dumb. Trust me, he’s not dumb. I’ve known him for years and he’s really, really smart. Like scary smart, freako IQ, way high on standardized tests all his life. He remembers everyone he’s ever met. He remembers every detail of every meeting and loves to freak out little junior Borgsters by recalling everything that happened at some random one-off from months or even years before. Total photographic memory.
The problem is not that he lacks IQ. Sure he’s Rain Man when it comes to remembering things. The problem is he has no vision, and no imagination. He’s all left brain. Hence this Yahoo offer. All he can see is that Google keeps beating the snot out of Microsoft and after all these years his coders still can’t create a search engine that works as well as Google’s and no matter what Microsoft does they can’t catch up. He’s tired of banging his head against the wall, so finally he just says, To hell with it, let’s buy someone and see what happens. His board is just as tired and bereft of ideas so they say, Sure, whatever, go for it.
But here’s the really dark part of all this. He knows it won’t work. He has to know this. He’s not stupid. The cultures will never fit together. And the deal is too big. It’s not manageable. And it’s completely anathema to Microsoft. It’s totally out of character for them. It goes against everything the company has ever stood for. Ballmer knows this, and he’s doing it anyway. Because this is exactly what every old-guard CEO does when all else fails. I mean it’s right there in the official playbook that you get in business school. And ultimately, smart as he is, Ballmer is an old-school kind of guy. He’s not really a tech guy. He has a mindset that was formed in Detroit, where he grew up. He’s a Big Three automaker kind of guy. And this is a Big Three move. It’s Ford buying Jaguar and Land Rover and Volvo because they can’t think of anything else to do.
So if the deal happens — and I’m not convinced it will — Ballmer will have bought himself maybe two years before it becomes clear to the entire world that it has failed. By then maybe Ballmer will be gone and someone else will have to mop up the mess. Or maybe Ballmer will still be around, in which case maybe he’ll do another deal and buy himself two more years or whatever. He’ll figure that out when he gets there. All he knows is that right now he’s got to do something. His stock has been underperforming the market for years. His shareholders are pissed. His board is grumbling.
But what, exactly, is the big vision here? I guess they’ll talk about how phase one was the PC revolution and now we’re entering phase two which is Internet computing and the cloud and they’ll say that by joining together they’ll become this giant powerful megacloud provider and the battle for utility computing is going to be all about scale. Oh, and synergy. Yeah. They’ll talk a lot about synergy. You know, like when you hook together a bunch of data centers that run on completely different technology stacks.
Scariest to me is that in all the articles I’ve seen the one thing Ballmer keeps bringing up is how he’ll be able to save $1 billion a year in costs. Are you kidding me? Is this Microsoft or Dunder Mifflin? I mean, I don’t doubt he could save a billion a year. But it says a lot about the kind of company Microsoft has become that this is what they’re thinking about.
According to our spies in Redmond the general consensus among the Borg rank-and-file is sheer and total dread. At best they see this as a giant pain in the ass, an enormous drain on resources, an unnecessary and pointless distraction with lots of nights and weekends spent slogging away on random useless bullshit and dealing will all sorts of annoying non-Microsoft people who don’t understand how Microsoft does things but can’t be blown off or pushed around like the “partners” the Borg is accustomed to dealing with.
Imagine a circus act in which two enormous, clumsy, awkward elephants that don’t really like each other are supposed to mate while riding on skateboards. Now imagine that it is your job, you lucky bastard, to be one of the little circus clowns standing alongside trying to make this extremely unnatural and unholy act take place. Hundreds, maybe thousands, of people will have their lives completely ruined and flipped upside down for the next two years because of this deal. They’ll see even less of their kids. And those ski weekends? Forget about it. Ain’t gonna happen. Meanwhile Google will keep pulling away.
That’s the good scenario. In the worst-case scenario the merger turns into a never-ending world of shit à la AOL and Time-Warner, and Microsoft ends up gutted and gasping and then they waste another few years debating whether they should break the two companies apart and if so how do they do that and then maybe some prick like Carl Icahn or Kirk Kerkorian jumps in and adds to the misery.
Yeah. It’s that good. That giant buzzing sound you hear is the whirring of photocopiers in Redmond revving up and spitting out resumes. If this deal goes through people will be crawling over each other to get out of that place. You wonder why old-timers like Jeff Raikes and Charles Fitzgerald are bailing? Now we know. These guys are good soldiers who stuck it out through the DOJ nightmare and fought the good fight. But they’re done. They’re not hanging around for this mess.
Which brings me back to the three-legged racers in the 100-yard dash. Back when Microsoft was riding high I was talking to Ballmer at some conference — I have no idea where or when, but I’m sure he remembers exactly which conference this was and what day of the week it was and the number of the hotel room he stayed in — and on that day somebody had just announced some huge anti-Borg merger, and all the idiots in the press were saying this was going to kill Microsoft, and Ballmer was just laughing. Laughing. Laughing his ass off.
Ballmer said he loved when his rivals merged, because whenever the also-rans in any market start teaming up they might as well be waving a white flag. Because it’s over. You’ve beaten them. You’ve driven them to despair. They haven’t been able to beat you on their own; there’s no way they’ll do it together. Then he told me that line about the hundred-yard dash.
I’ll never forget it. But I guess he has.