Tuesday, February 05, 2008

What Next? 

Microsoft's hostile bid for Yahoo is probably best for shareholders looking for a good return. But, (there is always a "but") how is a combined company likely to fare? The record for mergers is so dismal, especially with culture clashes, that a rule of thumb for many companies is never to attempt a merger of equals. Rather, they buy little companies they can absorb quickly and whose cultures may not be deeply established.

In communications and management style, the differences between Microsoft and Yahoo will be substantial. There are two schools of thought for how to handle this. Some CEOs say to act quickly: Others prefer to back off and even allow merged companies to operate as they always have. Either solution is right or wrong, depending on circumstances. The wisdom of the CEO is to know which approach to choose.

Communicators at Microsoft and Yahoo will be caught in the middle of the turmoil. It will be interesting to watch how they handle the transition.


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