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Microsoft + Yahoo = Sears + Kmart

Is Microsoft the new Sears?

Like Sears, Microsoft is a company long dominant in its core business that is falling behind as the market moves to another paradygm.

Sears' solution was to buy Kmart. Microsoft's is to buy Yahoo.

  • Sears' $11 billion Kmart purchase added more stores. It became #3 in its market, extending its reach to a declining base of shoppers who increasingly took their business to Wal Mart.
  • Microsoft's $45 billion Yahoo purchase will make it a distant #2 in the search market, extending its reach to more users who increasingly do their business with Google.

  • Sears' acquisition of Kmart didn't improve its technology position against Wal Mart, which was far more efficient.
  • Microsoft's acquisition will combine two second-string search vendors' technologies, neither of which presents a serious challenge to Google.

  • After consolidation and rebranding, Sears remains a department store in transition and Kmart a discount store that cant' find its niche. An mash-up called Sears Essentials failed miserably and is being dismantled. Stock is down from $195 in April 2007 to about $104 now. The CEO was forced out and the company is in the midst of a restructuring.
  • Microsoft ?

 

Are there other parallels, or have I taken this as far is it can go?

Related Articles and Opinion

What People Are Saying

Rate this
Rated -22
158 Votes

Kmart was used to purchase Sears

Please read the financial reports, Kmart funds were used to purchase Sears. The combined company
is called "Sears Holding", This new company was designed for investing. Eddie Lampert purchased Kmarts dept for $300 million. Then, he sold off Kmart real estate, and used those funds to purchase Sears.
The company is called Sears Holding, due to customer surveys, that showed the Sears name to be more respected.

Rate this
Rated +25
285 Votes

sears/kmart

Only 1 thing wrong with article,sears didn't buy kmart,kmart bought sears.

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Rated +7
277 Votes

I think this sums it up.

I think this sums it up. Microhoo!

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Rated +12
312 Votes

Microsoft=Sears

I suppose your comparison Microsoft to Sears appears to be invalid based on your assumption that SEars acquired KMart. Nothing of the kind ever happened.

I assume the error was caused by not having done even the most basic research on Ed Lampert's acquisition of Sears.

Put plainly, Sears did NOT acquire KMart. KMart Holding Company, the company formed by Lampert after he had finagled his way into control of KMart and a story in itself, ACQUIRED SEARS ROEBUCK AND COMPANY through some highly dubious finagling of KMart's real estate valuations.

He then combined the two entities into the current Sears Holding Company. So while Sears Holding Company (not Sears Roebuck) owns both Sears and KMart names, it didn't even exist until after all the acquiring was done.

So while I suppose you could say that KMart bought Sears, there is nothing that even remotely suggests that Sears BOUGHT KMart.

Rate this
Rated +33
279 Votes

Brain damage

Yes, I have backwards on who bought who. I seem to have had a few misfiring synapses on Friday. Thanks for pointing that out.

I do think the merger of the two retailers provides some interesting comparisons with the proposed Microsoft / Yahoo marriage.

--Rob

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Rated +14
322 Votes

Kmart aquired Sears...

Some of your points are still valid but you don't know who acquired whom in an $11 billion acquisition?

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Rated +5
303 Votes

Sears + Kmart

For the record Kmart Corp acquired Sears. Please do research before you make inane comparison and speak as if you're some financial business guru insider who can prognosticate the future of two companies by one simple comparison. Aside from the fact that you start your argument off with misinformation of Sears purchasing Kmart, you also are comparing two mediocre companies who merged with two successful companies. Please, end the charade and find another job. You obviously have no business discussing or analyzing mergers.