Here’s one of many early-warning signs that the Yahoo (YHOO)-Microsoft deal, if it happens, will be a disaster.
For the combination to work, Microsoft (MSFT) will have to be ruthless about eliminating its own weaker web brands in favour of Yahoo’s stronger ones. There is no reason to combine the companies if Microsoft plans to continue to maintain “MSN”, “Windows Live”, “Hotmail,” and other brands. Doing so would be similar to rolling up Lycos, Infoseek, and Excite and running them all as separate search engines: Even if you saved some money merging the back-ends, the consumer front-ends would die on the vine.
Killing its own brands will be tough for Microsoft–the company has invested a lot of time and money in building them, and, politically, eliminating the “Windows” branding especially will be tough. But this will be critical if the merger is to succeed. It is also an arena in which Microsoft has struggled mightily in the past.
Consider the company’s mail branding. Kara Swisher outlines the current offerings and speculates about what might happen when the brands are combined:
Yahoo! Mail is considered a stronger brand. Hotmail has already been in the midst of a transition, including a recent name change to Windows Live Hotmail. Microsoft’s mail offerings now include Hotmail and also Windows Live Mail. The latter offering would presumably remain at the merged company with its @live.com address.
Kara is speculating here, so we shouldn’t assume Microsoft would be shortsighted enough to maintain the “Live” address–or, worse, continue to flog a service called “Windows Live Hotmail.” (They should kill the latter tomorrow, with or without Yahoo.) But Microsoft’s tortured web branding decisions–in mail and elsewhere–over the past decade raise a yellow caution flag.
The biggest hurdle for the Yahoo-Microsoft deal is the combined entity operating within a behemoth that is still powered by Windows and Office. It’s not hard to imagine the meeting in which the Windows kingpins nuke the idea that the Windows brand will be struck from the company’s mail service…which could eventually lead to a horrific compromise like “Windows Live Hot Yahoo Mail.” At which point even we decade-long Yahoo Mail users, will be decamping for Google.
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