What Microsoft's Yahoo Bid Means for IT

In case you missed it, Steve Ballmer mailed Yahoo's board of directors on Friday a love letter proposing an acquisition to the tune of $44.6 billion or $31 per share. You can read it here.

Larry Dignan thinks that Yahoo should take the deal noting that

Sure, there would be some overlap between the companies, but Microsoft would get Yahoo’s managers like Sue Decker and research teams. Microsoft touted R&D critical mass and innovation as two big selling points. In addition, the two combined Web giants could cut a lot of costs. Microsoft is estimating about $1 billion in savings from the combined entity.

And what are the implications for collaboration? Long-time UC analyst Jim Burton sees this as as a Microsoft play for a mobile UC strategy:

Microsoft has not presented a broad UC strategy for the mobile market. I am sure they are working on one and a Yahoo acquisition would be a great help in jump-starting the move from strategy to implementation. Yahoo does a great job of organizing information and services into portals. They are typically broad horizontal offerings – the type of market position Microsoft likes.

Eric Krapf wonders about the implications that this will have for Google and suggests that Google-Cisco merger may be in the wings:

More significant could be the effect such a deal could have on Google. With Microsoft striking so close to the heart of Google's core business, presumably Google will have to respond by being even more aggressive in trying to shift the model to 'cloud computing'

So if we enter a new era of blockbuster consolidation, how about a Google-Cisco merger of equals? It fits neither's modus operandi when it comes to M&As, but would a Microsoft-Yahoo combination change the playing field?

The Google-Cisco deal might seem some what bizarre given Cisco's traditional hardware focus, but having visited last week with Cisco's Cullen Jennings it's pretty clear that the company is serious about Web 2.0 technologies with search being one of them. More on that score later....

Nobody has mentioned the tie-in Sharepoint and enterprise search. As you'll recall, Microsoft announced its intention to acquire enterprise search leader FAST in January. Aside from integrating search results into a common appliance, Microsoft-Yahoo deal has some interesting implications for the whole enterprise social network space Yahoo's got great community features. Tie that in with FAST and Sharepoint and you could end up with an IT community, something along the lines of a SpiceWorks.