Yahoo is not Microsoft’s AOL

I have just finished reading an article in Fortune’s February 18th edition saying the merger will be failure and comparing it to the AOL Time-Warner deal. I have seen lots of articles out there about why this deal is going to be difficult and I agree with a lot of them but the AOL Time-Warner deal is a rotten metaphor.

That deal was about the triumph of the Internet over Brick and Mortar. It was about a company bringing internet savvy to a an old business that was being left behind because it didn’t get the new business paradigm. This deal is about two competitors trying to catch-up in Web 2.0. It’s about size and catching up, not learning a new paradigm.

That deal had the David (with a Goliath stock) taking over the Goliath. There is no David in this deal. The challenges faced in that deal came from David not being able to control the Goliath and now the talk is about the Goliath seprating itself from the David. After all, one of the biggest differences is that AOL was the buyer.