I don’t get the whole Intel buying McAfee thing. Sure, security looks like a good business. But Intel is a chip company. Yeah, microprocessors are mostly software down under, but that doesn’t mean Intel has the soul of a software company.
Call me Old Fashioned, but I’m in the camp of thinking there needs to be some kind of synergy for it to make sense to combine entities like this. Vast amounts of data exist to show that most of the time mergers destroy value rather than creating it for all sorts of reasons:
– Cultural misalignment destroys the productivity of one org. Chip companies have much different cultures than software companies. Not clear just how Intel and McAfee will fit.
– The perceived value paid was way less than the actual worth when the calm light of reason set in. Skype is a fine company, but it sure was a bad idea for Meg’s eBay. The 60% premium Intel is offering is probably what it takes to move an otherwise healthy company into a merger. But Intel’s track record of getting into new businesses is very spotty.
– Skullduggery. There’ve been notable cases where companies merge largely to offset problems with the numbers of another company. Sometimes one or the other is completely unsuspecting and a very unhappy story ensues. Look into Peregrine’s acquisition of Remedy for just one example. Not suggesting there is any skullduggery. I expect quite the opposite. But I wanted to create a sense of just how many ways there are for these things can fail.
There are many more reasons I won’t go in to. Synergy provides that margin for error that helps offset the elevated testosterone levels clouding judgments about a merger. With proper synergy, mergers can do great things. Ideally, companies need a merger strategy that identifies what sort of synergies they’re looking for and what the playbook is for replicating merger success. Look to Oracle and Cisco as great examples.
Frankly, McAfee should have been snarfed by someone with major Cloud ambitions. The Cloud needs serious security, and there are synergies with the Cloud I won’t go into here. Suffice it to say that some powerful potential exists when you own a good-sized Cloud and can take responsibility for defending its inhabitants from outside threats. That will be a more and more serious value add over time. Oh well, need to check how much Symantec is up on the expectation someone will want the remaining player. IBM?
And now, take the completely random thought about Google acquiring Adobe. That’s not just linkbait; there’s a lot more synergy there than I can see for Intel and McAfee:
– Google and Adobe are both software companies.
– They’re both focused heavily on the Internet.
– They’re both engineering geek cultures, of differing sorts. You got your ponytail Unix guys and your designers. If you can get them to peacefully coexist, that’s a mighty strong cocktail. Adobe’s origins in Postscript as delivered by PhD computer scientists like Warnock fit the Google mold.
– There is a nice synergy in their products. From Google’s perspective, think of it as extending their dominance from not just search and advertising but to the “last mile” where the web sites are created. For Adobe’s part, nothing says Internet more than Google. We won’t get into which is the cream (Adobe) and which is the coffee (Google), but these guys go together well.
– Not clear to me how well Google plays the Enterprise game. Adobe would make a nifty Enterprise division for them.
– I’ve talked in the past about Google UI. Okay, I ranted, and in fairness I ranted a bit at Adobe as well. But GOOG are the masters of min-UI. I won’t call it thin client any longer, but they do minimalist UI well. Adobe get rich UI ala RIA. It would be interesting to cross-pollinate the two.
– Google wants to own more of the non-textual world, and they’re pretty good at it. YouTube is no slouch and image search rocks. Adobe adds to that.
– Maybe that Flash VM is not a bad addition to the portfolio just in case the whole Oracle patent suit gets out of hand. GOOG is already very cozey with Flash. Imagine them buying ADBE and putting Flash totally into the Open Source world. It already has huge market share. Totally Open Sourcing all aspects of it would end the proprietary bitch. It’s a great phone and tablet app system. Sure would be a game changer.
– Python for server work and Flash for UI is a very modern powerful combination. GOOG is adding some interesting image capabilities to AppEngine too.
The whole thing would be a pretty amazing game changer if you think about all the implications.
Hey. I’m just sayin’!
Postscript
I wanted to acknowledge that Google fixed my UI beef with GMail on the iPad. Thanks, guys!
Dump your share of Symantec, as the company didn’t value ethics and integrity. It allowed David Freer (VP, Symantec – Norton, APJ) spent company money while dating with me (dinners, movies, lots of long distance phone bills, etc..). Even worse, he is a liar!
Symantec’s board, CEO, CFO, consumer head Janice Chaffin (also came from HP) didn’t care it at all, as they all received my complaints with evidences. They are not only never started the investigations, but also shut down the communication between me with the company and David Freer, Suzy Walsham, and all other emplyees (as I worked for Symantec before).
I think CEO not only demostrated his poor hiring ethical standard (probably even worse than Mark Hurb, at least Mark admitted he didn’tlive up to his own ethical standard),but also lack of the skills on decision making (it lasted 6 months till now vs. HP let go Mark Hurd such an important executives within a month), also lack of leadships, business directions. Just see Symantec stock falling fromo Feb. till now, which is a lot!!!!!!
The only thing CEO can do now is to buy Symantec’s stock to save the price, what a poor CEO! While CFO & CIO both chosen to sell their stocks at this moment. Are you brave enough to buy Symantec stock now?
http://www.gurufocus.com/news.php?id=103308
David Freer (VP, Symantec Consumer Business Units – Norton, APJ) is a BIG LIAR! He lied to me for more than two and half years for my true feelings, time, and money. Also kept saying I am the only one in his life. Even this year on Feb. 2, he used company line to lead me to have phone sex with him. Until I found out there’s some other woman, he made up another lie and finally admitted he’s been living with her for a year. Later, I realized they were all lies. He actually has married March 2009. And now he just totally disappeared and not answering any phone calls, acting like “hit & run” irresponsible baby. Can you trust someone like this, with no ethics and integrity? The more unbelievable things are David Freer newly-wed wife – SUZY WALSHAM, she shamefully admitted she was the third person who broke up David Freer & his ex 12 years relationships, and mocking at me as the 3rd “unsuspected” person, as she agreed with his husband’s behaviors!!!!!! SHAME ON both of you, DAVID FREER & SUZY WALSHAM!!!!!!! (THEY BOTH WORK FOR SYMANTEC). I worked for Symantec too. Yes, Symantec is a bizarre company.
Nope. I don’t think any giant companies would like to buy Symantec. At least, HP won’t. As HP just fired Mark Hurd, which showed HP board has a much higher standard on Ethics & Integrity than Symantec. I believe IBM & Cisco won’t be interested in Symantec eiterh. Unless under the conditions of take out the CEO & management teams, as Microsoft once asked Yahoo to do so.
Before you checked how much Symantec stock’s price rose, maybe you shall also check how much Symantec stock falled this year. Almost 25%. It rose dramatically for the past two days, only becasue it is the next target to be merged? Pathetic!
As I have reported to Symantec Ethics about David Freer’s (VP, Symantec – Norton, APJ) misconducts (fraud, having dissented sex with me as he lied, using company resources for personal benefits – hundreds hours phone calls, hanging out with me during office hours, negative impacts on Symantec corporate image), what they do surprise me too. They basically ignore – never process the investigation, covering the serial lying & cheating criminal up, then threaten me. As Warren Buffet said when he decides which company is worth to invest, he values the CEO’s ethic and integrity the most. Being a senior management, David Freer shall walk the talks, instead he has set up a terrible example. How dare Symantec always campaign the company itself as defeat cyber criminals, but in the real world, Symantec acts just like robbers, mafia, & criminals. How ironic!