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Nice title, eh? Sorry sometimes I like sounding corporationy.

Umair Haque just wrote an excellent post “What Strategists Can Learn From Microsoft Vs Yahoo“, describing several lessons that can be learned from the recent Microsoft and Yahoo ordeal. What it boils down to is both companies have taken the wrong fork in the strategy road when trying to compete with the likes of Google.

Here’s the single, simple lesson. Microsoft’s battle for Yahoo is a case of asymmetrical competition in reverse: Microsoft is competing on yesterday’s terms. Instead of using new DNA to revolutionize deeply troubled media and technology industries, Microsoft is simply buying more resources to plug into yesterday’s DNA…

This leads to a greater problem for Microsoft than just the Yahoo issue at hand. The big fat pink elephant in the room is asking the question of Microsoft’s current and future strategic relevance. Every department you look into at Microsoft you see an increasing strategic irrelevance. Their cash cows are being eaten by Purple Cows. This falls right in line with Umair’s concept (mentioned above) of asymmetrical competition, which he explains as…

Today, its time for boardrooms to consider a troubling proposition. Competition is increasingly asymmetrical: pint-sized revolutionaries are able to pop seemingly out of nowhere and topple yesterday’s giants – fast.

The point is Microsoft’s (and Yahoo’s for that matter) problems cannot be solved through acquisition - it’s takes a structural DNA change for a company that size to regain their strategic relevance. It’s going to be an uphill battle, especially without their visionary at hand.

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