How to start and run a social network

So… Microsoft is bidding to acquire Yahoo! Oh… wait a minute, did I read that right? Wow… imagine that! Ladies and Gentlemen, if the Super-Bowl wasn’t enough in making this an interesting weekend, here comes Microsoft with arguably the most audacious coup in the technology industry for the year! Usually, I would give out links to related posts on the web but I wouldn’t do that just this time ‘coz it is every freakin’ where! If completed, this would be the largest acquisition MS has made and the biggest internet merger since AOL bought Time Warner for $112bn in 2000.Tech stocks that were sagging till yesterday in Wall St. have suddenly started looking up. People are talking of selling their cars to buy some MS and Y! shares. But we know Wall Street – always the emotional and impulsive type.

But let me not go into the usual M&A analysis that is currently being spewed out in the blogosphere during the past 12 hours. Enough is being said already. What I would like to do, is to think through this scenario under the context of social networking/media. Microsoft being what they are, under the merged entity, what will happen to all the social media assets that is currently being owned by both companies. Both, in terms of external investments, and outright acquisitions, both forms have fairly competing and complementing media assets. Not the mention all the bright people who have been literally working their a$$ off to make their platforms successful. What would be the implications on the current social content/media landscape once this merger is completed? Here’s my hypothesis -

1. Easy Picking for Start-up – Yahoo had already announced a layoff of 1000 employees recently. Adding to that, there is a level of rising bitterness inside Yahoo that is being reported on various blogs. MS has said that it is confident that it can save at least $1 billion in operating expenses in the merged company. With more heads rolling, I am sure that it will add to the existing pool of ex-Yahoo’ers in the market, thus making a large pool of available talented individuals with strong pedigree, looking for interesting work. Suddenly, start-ups will find that hiring new talent is not as difficult as they originally planned for.

2. Microsoft has a stake in Facebook and has covered some ground with Office Live! Yahoo! currently owns Zimbra, Flickr, del.icio.us and the likes. Not to mention their experiments with Y! Mash. These are some of the pioneers in the general proliferation and acceptance social content/media/network platforms. What will happen to them? They will become MS teritorries now. But with MS having made an investment in Facebook, I can easily imagine a titght lock-in scenario where all these platforms are combined together in a service-based model. Imagine a single platform that allows you to -
a. Network with friends (FB)
b. Share pictures (Flickr)
c. Exchange bookmarks (del.icio.us)
d. post and apply for jobs in your network (Hotjobs – watch out LinkedIn!)
e. create & deploy widgets for you & your friends (konfabulator)
d. write and syndicate blog content within your network (MyBlogLog)

Now that will be one big-a$$ platform controlled by a big-a$$ company. Suddenly MS has bought itself into being the Social platforms arena with one big swipe!

It is a completely different question as to whether this will work. But nevertheless, the synergies in the social arena are obvious and easy to comprehend. Let’s see if Steve B can work his magic here!