Business Architecture - The MS Yahoo Merger

If Microsoft succeeds in the takeover of Yahoo, what will that mean for business architecture of the new company?

Microsoft is a unique company -- like so many others you would say -- but the uniqueness of MS lies in its legacy power. An example will make this clear. If you surf to the Microsoft Site for the annual report (1) you are offered this report. Now comes a unique MS feature. You can download this report but it is not in pdf -- everybody would agree that pdf is the STANDARD format for offering an annual report.

Instead. Microsoft offers the report in .doc (Word) format (Yahoo offers the report in both PDF and HTML).

What this indicates about the business architecture of the company leaves no questions: "We have set the standard and others have to keep on following us."

But the world changed and the possible takeover of Yahoo can be read as a catching-up with the markets, that have moved into another direction.

Possibility one: there is no change. Microsoft and Yahoo remain separate entities but yahoo profits are consolidated with those of Microsoft. Minor changes are needed and are concentrated in the head-quarters.

Yahoo's mission is "to connect people" The Annual report opens with a feature of the Flickr application in which the word "Yahoo" is spelled by consecutive photo's.

From the annual we read about the customer-centric culture and capabilities. "we have organized our services around audience segments ... rather than around products."

This shows a main difference with the organization of MS that is centered around product-groups (Microsoft business division, entertainment division are all product centered units. With a traditional (development) structure: product development, distribution, marketing and sales, etc.

On a very high level, the business architecture of both companies offer the theoretical possibilities of business synergies. MS could be seen as a software company with some search and community services (80/20) Yahoo is the other way around a company with some software developing parts and a dominating search and community service (20/80). The advertisement market is what both have in common and where both compete with Google.

Possibility two: Yahoo is bought only to get rid of the competition. But this is not very likely, it could even harm the image of Microsoft.

Any other option is some kind of an integration of both companies. The shown resistance of Yahoo is understandable, because a of the mentioned differences between both organizations.
The biggest challenge is the required cooperation of employees with such a different background. The questions has practical implications on the level of the search-engine. What will happen to these search-engines: will they integrate into one new back-end search-engine with two (yahoo, Live) front-ends? And which system is superior?