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Bracing for a Yahoo!-Microsoft culture clash

Marketplace Staff Mar 17, 2008

Bracing for a Yahoo!-Microsoft culture clash

Marketplace Staff Mar 17, 2008


KAI RYSSDAL: Yahoo! said “no” when Microsoft first offered to buy it. For years, free-wheeling Internet companies like Yahoo! saw Microsoft as the enemy. But last week, senior executives from Yahoo! and Microsoft met for the first time. So as analysts predict a deal will be done, thousands of Yahoo! employees are discussing this question: What happens to life at the office if Microsoft succeeds? From Silicon Valley, Krissy Clark reports.

KRISSY CLARK: You can find a lot of math whizzes in Silicon Valley. But as people head home from Yahoo!’s shiny silver headquarters in Sunnyvale, nobody wants to tackle this bit of arithmetic: namely, what you’d get if you add this:



How well would Yahoo!’s famously laid-back corporate culture fit in to Microsoft’s more buttoned-down approach?

Yahoo! Employee: It is of course being discussed — that’s probably all I’m allowed to comment. I’m sorry, we have very strict directives.

Yahoo! employees have been told not to talk publicly about any aspect of the possible take-over. Officials refused to comment. All of which explains why people crossed the street as I approached with my microphone. But a few employees admitted anonymously that the question of a culture clash has been on their mind. Like this guy, who works at Yahoo with several ex-Microsoft employees.

Yahoo Employee: I was told by many of the ex-Microsoft guys Yahoo!’s culture is much more relaxed, more self-driven. And I’m probably at Yahoo! because of that culture, because of the way people work together — the one team. I don’t think Microsoft has that kind of atmosphere.

Layoffs are a concern with any merger. But some employees are asking themselves whether they’d want to stay after a Microsoft takeover. Insiders predict at least 10 percent of Yahoo!s would leave.

Pablo Puerta Lopez thinks it’ll be more like 30. He’s a software engineer at Craigslist, who worked for Yahoo! until 2006. And since Microsoft announced its buyout plan, he’s heard from a lot of his old Yahoo! friends — they keep emailing him their resumes. He says the more experienced Yahoo! engineers just aren’t interested in working for Microsoft.

Pablo Puerta Lopez: It’s a company from the ’80s, early ’90s — it’s a company that can’t compete with the changing times. Somebody with 10 years of experience can say “OK, no more. I can knock the door of Google, or I can join one of the new start-ups in the valley.” So I think most of them might quit.

It’s not just Microsoft’s public image that might inspire Yahoo! employees to quit — it’s the back-end technology, too. Ellen Siminoff is a former Yahoo! executive. Now she heads a search engine marketing firm called Efficient Frontier that works with Microsoft and Yahoo!. She says Yahoo! employees have always valued the freedom to choose what software platforms they use to build their technology. Many work with publicly available, open-source programs. But under Microsoft leadership, that would probably change.

Ellen Siminoff: It’s hard for them to say we just bought this huge asset, and it is not on the Microsoft platforms, and then go out and sell Microsoft platforms. It might be odd.

The alternative — switching Yahoo!’s entire operations over to Microsoft technology — would be daunting too. When Microsoft bought Hotmail, it spent three years weaning the email company off open-source software. But there are other parts of Yahoo! tradition that should go, according to Owen Thomas, editor of the Silicon Valley gossip blog Valley Wag.

Owen Thomas: Yahoo!’s always had this culture of enjoying work, being nice to each other. A lot of people find it kind of sickening — it means that a lot of necessary conflict doesn’t happen.

In fact, that’s one of the only areas where Yahoo! employees think Microsoft might do some good, Thomas says.

Owen Thomas: They’re feeling grateful that something might actually get done for a change.

Still, any kind of change is scary, says the former Yahoo! engineer Pablo Puerto Lopez.

Lopez: I just talked with a Yahoo! employee — he told me, “You know what is terrible? Microsft doesn’t have free coffee, they have free juice.” It was a tragedy for this guy that they don’t have free coffee.

Some folks would be quite happy to watch Yahoo! and Microsoft battle it out over free juice versus free coffee. At the headquarters of their leading competitor, Google, all the food is free.

In Sunnyvale California, I’m Krissy Clark for Marketplace.

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