April 21, 2018

My Opinion on Strategic Acquisitions and More




You may wonder why I am writing about M&A (Mergers & Acquisitions). Me too. I can’t even pretend I know anything about it. It’s safe to say, I will never be in the position to talk about it. But again, I happen to have some opinions and I want to share.

This post is sparked by recent talks about the rumors of Microsoft bid for Saleforce, Microsoft’s acquisition of Nokia Mobile, and the history of Microsoft’s bid for Yahoo.com.

I don’t want to get into details, but the conclusion always is: Steve Baller was wrong, everybody else is right. I want to say something when some popular opinions get it wrong, event intelligent people join in and say it is right.

The Nokia acquisition was strategically important. Anyone disagree? But when there is a quarterly write-down happens, almost everyone start shouting: Ballmer did that, and I told you that was wrong.

Yahoo acquisition didn’t go through. Years later, people look at Yahoo and say: I told you, Baller dodged the bullet by luck. I don’t know about that. I don’t care how many smart people there could predict the future, but at the time of the talking, Microsoft certainly should do what they did. You don’t look at the Yahoo today, comment on what happened many years ago. Because you don’t know how much momentum it would have turned in when that had happened. If that had happened, the history might have gone a different path.

The Saleforce thing is, in my opinion, very important strategically. If you really want to measure the success of strategic acquisition, you have to put it in the big picture. Dollar by dollar measurement doesn’t apply here.

Imagine what happens if Nokia acquisition didn’t go through, anyone?

The thing is, I am not the only one who doesn’t understand M&A, there are many journalists, and many executives too.


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