Microsoft-Yahoo: Enterprise confusion

Microsoft's announced acquisition of Yahoo may alienate and confuse the software giant's enterprise customers. Given Yahoo's focus on consumer content, enterprise customers must ask whether this acquisition signals dilution of Microsoft's enterprise focus and strategy.

Over the years, Microsoft has assembled an impressive collection of enterprise software, designed to help the company dive deep roots into the heart of corporations and governments. The company has based its enterprise-oriented strategy around such product categories as:

• Operating systems, such as Vista and Windows Server
• Mid-range ERP, CRM, and accounting, such as Dynamics and Solomon
• Technical infrastructure, including SQL Server and Exchange
• Virtualization, such as SoftGrid

In comparison, Yahoo is a consumer-oriented media company delivering content via a software user interface. Yahoo products include:

• Consumer email
• News
• Mapping
• Music
• Job search

Few companies have succeeded simultaneously in both enterprise infrastructure software and consumer content. There's a reason for this: the skills, mindset, culture, economics, and sales environment are completely different in the two domains. The acquisition will make Microsoft appear schizophrenic and unfocused to enterprise software buyers.