By now everyone’s heard about Microsoft’s mongo-bid for Yahoo as MS tries to reposition itself against Google. I’ve been reading the opinions out there, and there have been many comments about both Microsoft’s and Yahoo’s previous mis-steps and lost opportunities. Interestingly, there’s a $5.4b Yahoo mistake I haven’t seen written about (tell me if you see otherwise), but I’m talking about how Yahoo failed to position itself as the global leader in online video back when it had the chance in 1999. Yes, I’m talking about the buyout of Broadcast.com which was, at the time, the largest aggregator and distributor of audio and video on the net, and, arguably, the world.
I’ve got some strong opinions on this since I was there. The following is my recollection of events.
I’d previously served as Director of Technology and was currently serving as VP of International Development and Special Projects. I was basically a “fixer” — since I’d been there since the beginning and knew where the skeletons were buried, I was often called upon to help launch new projects, solve problems, close deals, etc. It was 1999 and I was helping to shepherd the merger between Yahoo! and Broadcast.com, visiting Yahoo offices around the world as I worked on our International expansion plans.
I was shocked when I visited Yahoo’s HQ to discuss synergy strategies — and was rebuffed. I encountered a monolithic “not invented here” attitude. Who was I to intrude on Yahoo’s perfect plans?
I came back to Dallas and told Mark & Todd what had happened. What it boiled down to was that there was no synergy plan. All such plans and decisions would come from Yahoo — there was to be no back and forth. We would accept their great wisdom from on high. And like it.
Right.
I paraphrase this, of course, but that’s basically what happened. I waited to see what would happen. Where was the plan? It never came. I eventually went back to Todd and said, ‘look, I can’t sit around and watch Yahoo destroy everything we built and lose all our market dominance. ‘ I predicted that Yahoo would effectively dismantle us within a year.
I was wrong.
It took about six months. The sites were never truly integrated. No synergy was ever reached.
So what? Sour grapes?
No. At the time, Yahoo was king and like so many kings, was overconfident. What seemed like a great strategic merger turned into a stock deal. What is sad here is that Yahoo threw away a chance to integrate the worlds largest search engine with the worlds largest audio/video content aggregator. Who knows what *could* have happened. We’ll never know. We’ll also never know if this dropped ball opened the door for YouTube. Draw your own conclusions.
Other mistakes and lost opportunities are being talked about elsewhere and I won’t rehash them here. Everybody makes mistakes. I’ve made some doozies myself. The question in my mind is this — Does Microsoft have a well considered synergy plan? Will they be willing to listen to Yahoo? Will both be willing to change and adapt when things don’t work out the way they planned or will inertia, pride, and job security concerns keep them from changing the battle plan after it meets the enemy?
-pfs