It seems to a season of merger speculations. Here are three proposed mergers that people are talking about…
Google + Intuit. Nick Carr wants Google to accelerate its software-as-a-service attack into the small-business by buying Intuit. QuickBooks, Quicken and QuickBase will flesh out its portfolio and rope in new customers. The debate on this is just getting underway.
Microsoft + Yahoo. Jeremy Schoemaker broached this in mid-Dec listing 10 reasons why MS will acquire Yahoo in 2007. Basically he suggests that this is the only way for the two of them to compete with Google. While the speculation has remained alive, not everybody buys into the idea.
Apple + Adobe. Jeff Nolan floated this idea recently. He thinks that Photoshop can help sagging Mac sales. He also suggests that Apple will be able to better promote Apollo and together they can redefine the web application space. Apple has the $12b cash horde to do the transaction. Yet there are cynics aplenty.
Ironically, in the midst of this sappy talk about potential mergers, there is a strong rumor doing the rounds about private equity buyout of Symantec. If this buyout happens, it will, in effect, unwind the VERITAS – Symantec merger of 2005. It’s a reminder that big mergers often don’t work out in the long run!
I will try hard not to add to the speculation but will comment on whether big mergers work out. Big acquisitions are an art. It’s common to see acquisitions be killed given it threatens the core (acquirer) sooner or later. It’s relatively uncommon to see acquired companies kill of competitive initiatives entirely within the acquiring firm. It’s often interesting to note how many companies forget that the latter behavior is why the acquisition happened in the first place. And I never understood why savvy managers don’t spinoff a failed acquisition and recoup some of the value for shareholders than running the acquisition to the ground as has happened so many times.
BTW, why Yahoo? Why not a Google Apple against MSFT not only pitting against the Zune but I’m waiting for a virtual Mac desktop (the new Google desktop) hosted by Google datacenters. Now all you need on your laptop device or PDA/Mobile is firmware that connects to and boot Google.
How about Goo-bay/e-Gle (Google eBay)? Several events seem to be pointing to this merger.
July 2006
Google founders (Larry Page and Sergey Brin) and PayPal founder (Elon Musk) co-invest in Tesla Motors Inc. to develop a luxury electric car.
August 2006
Google and eBay Sign Multi-Year Agreement to Connect Users, Merchants, and Advertisers Around the Globe
Tanmoy beat me to post. My vote is for Google to buy Ebay.
Ebay stock has fallen so much recently that it has become a value pick - a 5* rating by Morningstar.
Google - with its inflated currency - can get a solidly cash generating business that is poster child for network effects (auction business of ebay) with skype and paypal thrown in.