Disney had the most watched television network, the most visited theme parks, and the box office busting animation studio to die for. Now it's struggling to keep up in all of its former strongholds, and that is fueling speculation that Disney might be on the block. It's a ludicrous notion, for various reasons, but bringing up Microsoft as the groom-in-waiting is downright hilarious. Mickey Mouse might be lining up for government cheese right now, but odds are it will be a meal for one.

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By Rick Aristotle Munarriz (TMF Edible)
January 10, 2002

Leave it to Wall Street to kick you when you're down. Suffering from a downturn in park attendance and with a film studio and television network in disarray, Disney (NYSE: DIS) has now become the subject of takeover speculation. Never mind that the company's megalomaniac CEO Michael Eisner has made defections at the top commonplace to the point where he would be hard-pressed to be anybody's wingman, much less a merger buddy. Never mind that Disney has been the planning to go on a buying spree of its own.

Disney President Bob Iger dismissed the rumors on Tuesday at the Salomon Smith Barney 12th Annual Entertainment, Media and Telecommunications Conference. "I don't believe Disney is a takeover target," he said. "Nor do I believe we're wounded." Bambi, we need to talk. It's about your mother.

See, Disney is wounded. It rode Regis and Who Wants to be a Millionaire all over the ABC prime time lineup the way Dexy's Midnight Runners rode "Come On Eileen." Do you know what happens when a broadcaster wears out its one-hit wonder welcome? It takes two steps down from the gold medal podium -- stepping out of the picture completely and losing some key demographic groups in the process.

Meanwhile, by default, Microsoft (Nasdaq: MSFT) has been mentioned more than once as a potential suitor given its gargantuan size and its dearth of in-house content. Is Mickey Mouse going to be hawking X-Boxes? Not likely. Buying out Disney at a shareholder agreeable price -- like the low $40s, which also served as the company's all-time high less than two years ago -- would mean an outlay of nearly $90 billion in cash and/or stock.

When a "wounded" company with that kind of market capitalization baggage becomes buyout fodder, everyone turns to Microsoft the way everyone motions over to the rich guy sitting at the dinner table when it's time to settle the bill.

It's not that it wouldn't be a good fit, you see. Save for the very worthy Slate, can you think of any redeeming content in Microsoft's coffers? Disney's content vault is ripe, and its brand, despite the last few years of missteps, is still golden, but is there anyone left who doesn't see that Disney is a cash cow with a farmer in need of milking lessons? The pieces seem to fit together, but neither party is humble enough to admit that it can't complete the jigsaw puzzle alone.

But probably the most obvious case against the marriage lies in Disney's own recent ineptitude with the ink and paint. With Disney's in-house animation studio losing its touch at the box office, it is forced to rely on its 50-50 partnership with Pixar (Nasdaq: PIXR) to produce the sure things like Monsters Inc. and Toy Story 2. Who heads up Pixar? None other than Bill Gates' long-time arch-enemy Steve Jobs. With Disney newsgroup purists clamoring for the entertainment giant to find a way to get the Apple (Nasdaq: AAPL) and the Pixar chief more involved in helping Disney locate the vision Eisner has squandered, can anyone fathom the bizarre possibility that the next Microsoft CEO could be none other than Jobs? I sure can't.

So, file away all this talk about Disneysoft into the nearest Fantasyland trash receptacle. It just isn't going to happen. Still, it would be amusing to consider the possibilities of a Microsoft-run Disney. As an appetizer for thought, here are some possible changes that could be made at the Disney World complex under new management influence.

1. The park promises to open at nine in the morning. The website says so. The park guide says so. Does the park open at nine in the morning? Of course not! The turnstiles won't start clicking until quarter past ten.

2. In the advance sale market, travel agents are encouraged to book groups at a discount. However, the forced itineraries will include unwanted side trips through gift shops, screenings of Kate & Leopold, and a tour of Disney's California Adventure.

3. "It's a Small World" will be updated with even more audioanimatronic children, all bolted to the same dry operating system. Singing the same song in harmony, there will continue to be little room for improvisation beyond the vanilla -- and, still, patrons will gladly toss their pennies into the water.

4. Already scarce entertainment offerings will be dealt a cost-cutting blow when the entire Magic Kingdom afternoon parade crew will be let go. In its place? Microsoft CEO Steve Ballmer, working up a sweat as he dances up and down Main Street USA. 

5. In a rush to get new rides up and running as cheaply as possible, the attractions will open to the general public despite the lack of appropriate beta testing to work all the bugs out. Wait! Isn't that what the parks did with Rocket Rods in Disneyland and Test Track over in EPCOT. Hmmm. This is awfully suspicious, don't you think?

Come to think of it, there is already a lot of Microsoftology at display in the Disney World complex. Sure, a mouse figured prominently in both companies, but let's get real for a moment. Just as Microsoft picked up on third-party applications that consumers were using and decided to bundle in-house imitations, Disney saw the slew of hotels, water parks, and miniature golf courses sprouting outside of its resort and decided to roll its own on all fronts to take advantage of its captive audience. Is Disney a monopoly or is Microsoft a self-contained resort vacation package?

The world -- or World as the case may be -- will never know.

Rick Aristotle Munarriz lives in Florida and can be found at Disney World far more often than he would care to admit. He also owns a couple, yes, just two, shares of Disney. Rick's stock holdings can be viewed online, as can the Fool's disclosure policy.