VZ/Yahoo!: “The next step is: How do we differentiate our strategy?”

Kara Swisher has a short interview with Verizon/AOL’s Tim Armstrong on the Yahoo! buy, which is still “pending of course.” It’s hard to take any interview about a pending acquisition on super face-value (no one wants to show their hand), but there’s some good indication that Verizon followed the “we’ll sort out the strategy details post-sale” plan. Armstrong himself says they’ll be working on figuring out differentiating, and “sources” say:

Verizon has had little insight into a number of issues, including the terms of the contracts with key employees, that it will need to make plans for the future.

I like the theory that the goal is, really, just to optimize the existing business:

“The deal that we contemplated is about growing the company and did not start with synergies,” said Armstrong. “We will be walking through a pretty direct process about what is structure and then cost structure and there will be synergy, but it is not at the top of our list.”

That seems like a low-risk plan. They’d be the biggest site by eyeballs in the US, which ain’t bad.

Also, more coverage from Reuters on the “RemainCo” company of Alibaba and Yahoo! Japan, and a cameo from Rita McGrath in a Will Oremus’s piece at Slate:

“It’s a beautiful example of a company that has a lot of indispensable pieces, but they don’t add up to an indispensable whole,” says Rita McGrath, professor of management at Columbia Business School. Yahoo’s problems, she believes, stemmed from “a fundamental unwillingness to choose” what kind of company it wanted to be.

And, 451 has their report out, by Rich Karpinski and Scott Denne. Some highlights:

  • “AOL generates roughly $1bn from its owned media properties – Yahoo pulls in 3.5x that amount.”
  • My summary of one of their points: as mobile use grows and grows, over the next 5-10 years, there’s a window for new top-dogs to emerge and take market-share. Seems like a legit theory. 451 describes the market here as: “opportunities in telecom data as a service, a market combining digital advertising, proximity marketing and an array of big-data insight services that 451 Research forecasts will grow to a $79bn addressable opportunity by 2020”
  • They’re not big on the advertising technology and networking component in Yahoo!.
  • There’s some indication that Verizon’s digital business is doing well, so maybe they’re pretty good at integration acquisitions.
  • There’s also details on the financials of “RemainCo.”

Tumblr not working out for Yahoo!

Originally purchased for $1bn in 2013, after failing to meet the $100m 2015 revenue goal, written down:

A bit of simple arithmetic puts Tumblr’s value after these writedowns at about $290 million. This is not only less than a third of its purchase price, but it’s also less than the value of Tumblr’s assets when it was acquired two years ago.

Source: Marissa Mayer promised “not to screw up” Tumblr, but she totally has

CPI case study: IBM and SoftLayer would be greater together

Data from 451 Research’s Cloud Price Index suggests that IBM is missing a trick. By going all-in and baking SoftLayer with Bluemix, IBM would gain a leading position in the market in terms of completeness of services and global availability, as well as finally delivering a single user experience.

Owen over at 451 suggests that IBM hasn’t yet merged SoftLayer into Bluemix totally, missing out on a high ranking in cloud providers (by functionality, geographic availability, etc.). Also: “The company claims $10.2bn in cloud revenue, a growth rate of 46% Y/Y, and 20,000 new users per week.”

Source: CPI case study: IBM and SoftLayer would be greater together

Microsoft Targets Hardware Business With 7,800 Job Cuts

Seems like the Nokia acquisition was a bad idea? “As a result of the cuts, Microsoft said it will record an impairment charge of approximately $7.6 billion related to assets associated with the acquisition of the Nokia business in addition to a restructuring charge of approximately $750 million to $850 million.”

Microsoft Targets Hardware Business With 7,800 Job Cuts

ING infects Capital One with Agile

When Capital One started to roll out agile development in 2011, Wolfs said it amounted to just one percent of software that was delivered. Today, 85 percent of software is delivered by the agile method. With agile, Capital One now also releases approximately 400 product releases a month, has cut delivery times to three to six months while “cutting costs significantly” and has 95 percent of products meet expectations on the first release, according to Wolfs.

That 400 releases figure speaks to the scale of the applications supported in large banks. Getting a handle on the population of custom written software (that is, NOT package software in use, but software the enterprise has written itself) is difficult, so tracers like this are helpful.

ING infects Capital One with Agile

How’s Microsoft doing with Yammer?

If we look at it from Yammer’s perspective, it’s been a good year. Being part of the Microsoft family has helped it grow its total user base by 60% in the last 12 months to almost 8 million users, and its number of paid networks has grown by 200%. Plus, Yammer’s 2012 full year sales almost tripled year over year, helped by a stellar Q4 performance.

Microsoft & Yammer: still a long way to go