tag:blogger.com,1999:blog-288858287590827405.post5633566027088425860..comments2008-04-17T13:35:00.243-07:00Leftyhttp://www.blogger.com/profile/14637607058852159739noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-288858287590827405.post-87126631710921912242008-04-17T13:35:00.000-07:002008-04-17T13:35:00.000-07:002008-04-17T13:35:00.000-07:002 major streams of synergies:<BR/>1) Cost - Consolidation of services<BR/>2) Building an efficient marketplace<BR/><BR/>Consolidation: The current hardware (fixed cost) to support all the services that these 2 companies provide require a massive investment. By combining these two companies, one can hope that they will consolidate their fixed cost/maintenance cost. <BR/><BR/>Marketplace: By becoming a bigger number 2 search player these companies are going to enable a better marketplace for search which in turn means that the revenue per search (denoted as RPS) - a measure of efficiency in search - will be higher. Essentially an efficient marketplace (ebay, NASDAQ, Google Adwords) requires high participation of supply and demand, and by merging 20% (Yahoo) and 10% (MSN) microsoft is going create that better marketplce. <BR/><BR/>Yes this is going to lead to layoffs and a lot of management turn. There are more odds that it wont work. Primarily the cultural difference etc etc etc, but there is a chance of this working. One can argue HP/Compaq did it, but they had the benefit of being in an industry which is slow moving.ehchkayhttp://www.blogger.com/profile/11165141097401035845noreply@blogger.com