Yahoo Can’t Fix Microsoft

It’s just as well that Microsoft failed to buy Yahoo. According to Forbes, Microsoft is broken beyond Yahoo’s ability to fix it.

So why wouldn’t buying Yahoo! help Microsoft? For starters, Microsoft is too slow and too cautious to keep up. While Microsoft howled after Google snapped up online advertising specialist DoubleClick last month for $3.1 billion, that’s just the latest opportunity Microsoft has missed. In 2005, Google beat out Microsoft to buy a stake in AOL. And while Microsoft carped after the DoubleClick deal, Yahoo! rolled up its sleeves and snapped up the 80% of Right Media it didn’t already own.

Of course, Microsoft often moves slow for a very good reason: It doesn’t want to cannibalize its cash cows. While Google can launch online spreadsheet and word processing applications, Microsoft can’t respond without damaging its powerful Office business. Elsewhere, it’s more of the same. Everywhere Microsoft makes money, the Web poses almost intractable dilemmas.

Microsoft is addicted to the milk from its dying software cash cows. You can’t cure an addiction by buying things.