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By | John Oates 10th March 2008 11:00

Microsoft's Yahoo! takeover faces technical challenges

Different platforms, different cultures

Microsoft is in no hurry to integrate the technology and culture of Yahoo! should the aggressive takeover go ahead.

The comments might seem a little premature, but differences in culture and technology have already arisen as possible barriers to the deal. Of course, there are other more pertinent barriers too - like Yahoo!'s board of directors.

Microsoft chief software architect Ray Ozzie told the Financial Times last week that he would not rush to merge the technology backbones of the two, even if this meant delaying some of the benefits of combining the two firms.

Ozzie said: "I'm not in any way unrealistic about the challenges that would confront us. They have a number of different types of technologies. They have their own corporate culture."

Yahoo! is a mixed bag of technology with a large proportion of its systems running open source or Unix software. Microsoft is, of course, mostly a Microsoft shop.

Ozzie told the paper he remained optimistic about the benefits of the deal.

Ray Ozzie was one of the creators of Lotus Notes, which was bought by IBM in 1995. He said he had learnt lessons from going through that process. He joined Microsoft three years ago.

Microsoft has mostly grown organically rather than by acquistion. It has never paid as much for a company as it is trying to pay for Yahoo!. Nor, arguably, has a previous purchase played such a central strategic role.

Ozzie also talked about the challenges of getting Microsoft to offer its technologies as online services using data centres. Most recently it began offering online versions of Sharepoint and Exchange for US customers - it hopes to start charging for the service, currently in beta, later this year. The company is also picking up data centres to support this push.

More from the FT here. ®

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