Acquisition mania squared at Microsoft
We've often written about how difficult it is for big companies to innovate, and at Microsoft buying or mimicking others' innovations has been simply a way doing business. We also know that big software companies have been snapping up little ones of late in a bit of a boom.
But this headline captured our notice: "Microsoft Planning to Buy 100 Companies Over Next 5 Years." It headed an article on the Web site CEOSmack.com.
The article outlines Microsoft's new research strategy, to wit:
Microsoft CEO Steve Ballmer says that instead of the company pouring tons of dollars into research and development to come up with the next big thing, his company will have a change in strategy. Ballmer says that the company plans to invest more in small acquisitions costing between "$50 million and $1 billion.
The article notes that Microsoft has already purchased 17 companies in 2007, and Ballmer, at a recent Web 2.0 conference announced that the company will probably buy around 20 companies each year for the next five year. After all, the company is sitting on $23 billion in cash.
You have to believe that a whole cadre of Silicon Valley developers started hearing "ka-ching" at Ballmer's announcement. And of course, Google, Yahoo, and others are in the same game. Build and flip, already a mantra, just moved up to a commandment.
