Yahoo Flees from Boarding Microsoft’s Titanic

The board of Yahoo has opted to reject Microsoft’s bid to acquire the company. The decision came after a series of meetings earlier this week. It was a wise decision.

Nothing illustrates the reality of Microsoft more than the Vista operating system that is its showcase: late on arrival, bloated in its functioning and incompatible with much of the world it depends upon. Microsoft operates a command and control culture that is in a state of constant paranoia, always fearful that customers are trying to get the better of it. So inward looking has it become that in the period it was trying to produce its newest operating system -the one that has become so much the bane of users that many demand the old XP system in their new computers -Facebook, MySpace and YouTube were conceived, developed and became a consumer phenomenon. Microsoft could have developed these applications, just as it could have done and become what Google has. It was too busy being big and becoming overly confident, still clinging to its anti-trust mentality and obsessed with the idea that customers are always trying to circumvent its software activation process.  Some companies aspire to become customer-centric.  Microsoft has turned customer-antithetic into a brand.

Microsoft has made a number of ground-breaking strides in its time, but it is doubtful that, as it is currently conceived, a match with any organization that prides itself on innovation and agility would make for a positive union. As the world learned from the costly AOL-Time Warner merger debacle, it takes more than money and high priced stock to make a happy corporate marriage.

Microsoft’s days as a transformative force in the world of personal computers and the Internet, barring a sea change in culture and attitude, are on the wane. The ability of the company to transfer its core values and management skills, honed in an era of market dominance symbolized by one-license-per-paying customer, to a more open 21st century cyberspace environment where success more and more is defined by the extent to which value can be added to the customer relationship without adding cost to it, is highly problematic. This is reality that long ago should have prompted a series of meetings by its own board to determine what has gone wrong with the Titanic of modern software companies, and what can be done to prevent it from meeting a similar fate. With its boardroom still on the Microsoft version of a Morse code operating system, the company’s directors will be painfully slow to decipher the message.