Microsoft Acquisition Acumen

July 5, 2012

When big technology companies buy other companies, the trajectory of those weddings is fascinating. Google has been a voracious consumer and discarder of acquisitions. Anyone remember Dodgeball? I read some of the stories about Microsoft’s purchase of aQuantitative. The Reuters’ news story is representative. Navigate to “Microsoft Takes $6.2 Billion Charge, Slows Internet Hopes.” The failure of acquisitions is common, and I am not too interested in what is obvious. However, I did want to document this factoid, which unfortunately we don’t know if it is accurate:

In addition to the write-down, Microsoft said its expectations for futuregrowth and profitability at its online services unit – which includes theBing search engine and MSN Internet portal – are “lower than previousestimates.”

How big is the Microsoft online business? “Chalk Up aQuantitative as Another Bad Microsoft Buy” from the “new” ZDNet:

Last quarter, Microsoft’s Online Services Division, the home of Bing andits online ad technologies, lost $480 million (which was actually $300million less than the comparable previous quarter).

My conclusion? Microsoft has deals with Nokia, the Surface alienation of some hardware partners, and the Fast Search & Transfer technology. The company seems to have had some bad luck with its new initiatives. Perhaps this is a management issue? I suppose one can blame the customers which some Microsoft competitors employ.

Stephen E Arnold, July 5, 2012

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