Last month Microsoft had to write down its purchase of aQuantive to almost 0, which they had purchased in 2007 for $6.2bn. At that time it was Microsoft’s biggest purchase in 37 years. Although since then, its purchase of Skype has topped that at $8.5bn. The write down lead to Microsoft’s first ever public loss.
The purchase was seen by many as a knee jerk reaction to Google’s purchase of Double Click which may have also added to an overinflated purchase price.
A failure to capitalise
There are some key lessons to be learned from Microsoft’s failure to capitalise on its purchase of aQuantive.
Firstly, it’s imperative you keep the right people on board. The senior management who have been leading the company can be vital in the short to medium term. They not only have product and market knowledge, but they also ensure there's not a mass exodus of staff. Microsoft retained aQuantive CEO Brian McAndrews as SVP Advertiser and Publisher solutions until 2008 when he moved to Clearwire.
Secondly, remember why you bought the business in the first place. Play to its strengths rather than try to and change its model to your current business one. It was rumoured that rather than utilise the display and targeting capabilities of aQuantive, Microsoft tried to shoehorn them into the search model to bolster Microsoft’s marketshare in that area.
The ideal integration
Finally, integrating at the right time and in the right way is key. Bringing together two companies with different business models and cultures is never going to be easy. Instead of thinking, “my purchase, my rules”, why not look at what has been working well in the company you have taken over? See if there are learnings here that could be transferred to your company.
Microsoft learnt a painfully expensive lesson with aQuantive, which could have at least been partially avoided if it had followed these rules in the early months.