February 1, 2008 - 2:23 P.M.
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?
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- Preston Gralla: With SP1 and Yahoo bid, Microsoft becomes the new IBM
- Mitch Betts: 5 reasons to worry about a Microsoft/Yahoo merger
- Sharon Machlis: Microsoft's bid for Yahoo: the risks
- Preston Gralla: Microsoft-Yahoo deal: The only way to save Microsoft Live
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