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It's Too Late to Apologize, Microsoft

Anders Bylund (TMF Zahrim)
February 19, 2008

"You tell me that you need me
Then you go and cut me down"

-- "Apologize," by OneRepublic

The proposed merger between Microsoft (Nasdaq: MSFT  ) and Yahoo! (Nasdaq: YHOO  ) hasn't even happened yet, but that doesn't mean the companies haven't been affected by it yet. They have, in a surprisingly big way. And no, it's not the good kind of change.

No need to yodel anymore
The recent layoffs at Yahoo! don't have much to do with the takeover attempt. They were announced before Microsoft laid its smooth moves on its smaller rival. What wasn't part of that early warning, however, was the quality of the people who are leaving -- voluntarily or otherwise.

Jessica Bowman, who was a search engine optimization (SEO) evangelist, was laid off, and entrepreneurial webmasters everywhere will sorely miss her. Advanced Technology chief Brad Horowitz left of his own accord, to take a job at Google (Nasdaq: GOOG  ) . Those are just a few examples. The brain drain has started.

Cheerless in Seattle
It's not much better on the Redmond side of the deal.

Steve Berkowitz, who joined Microsoft's online division after turning around and selling it to IAC (Nasdaq: IACI  ) , left the company. His old responsibilities were complex enough that it requires three people to fill his shoes. Another former CEO, aQuantive head Brian McAndrews, is simply one in that triumvirate. Berkowitz will stay on for a few months to get his replacements up to speed.

And you don't have to be a software giant to snag some talent that was either directly pushed aside by this deal, or just disenchanted with the proceedings. Vodafone (NYSE: VOD  ) is stealing Pieter Knook, who used to lead Microsoft's mobile-phone software operations.

What's next?
Again, this is just the tip of the iceberg. The Yahoo!s don't want to go. The Softies who are in danger of being replaced feel disrespected. Updated