As Microsoft prepares for a proxy fight that will pit them agains the Yahoo board in the fight over control of Yahoo, Bill Gates is talking up the deal as a way for Microsoft to access the great talent pool of Yahoo.    Although he’s certainly right that Yahoo’s got a lot of great talent, it is not at all clear that most of them will stay and work for Microsoft.   I think a lot of the Yahoo staff will see MS as trying to consume them into the Micro Borg mother ship, rather than work with them to make a better Yahoo/MS to fight the Google wars.

I suspect they will if MS treats them right, and I think MS would treat them right, but it would not take an extraordinary poaching effort from Google to effectively dismantle the really great parts of Yahoo.   Oh, yes, and this Google poaching has already begun. 

A couple years ago – at the Google Party no less – I was involved in a fascinating conversation with one of the key search guys from Microsoft’s search engineering team and another top engineer from Google.  One of the most interesting topics was how MS felt that Google had very selectively poached a key Microsoft search insider.    The MS guy said until that point he felt Google had been basically playing fair, but that he knew from that episode that Google was strategically picking off people not so much because they wanted them but because Microsoft *needed* them.      He felt this defied the “don’t be evil” Google mantra and had soured him on Google’s honesty in these matters.    Suffice it to say that as much as I think Google *usually* does follow the “don’t be evil” mantra there was some pretty interesting clandestine activity going on at that party to record the MS guy as several beers got him to spill more beans about the MS algorithm.    In fact it was then I realized how weak the MS search effort was with what he said were only 300 engineers working in search, while Google had *thousands*.

Gates is certainly wrong that the cultures are the same.   Based on my experiences with people from these three companies I’d suggest the cultures are pretty clear:   MS culture is a massive corporate empire with lots of heirarchies, corporate bloat, somewhat overbearing, and diminishes the role of the individual as a key part of the big team.  People are not proud to be with MS – they are often almost apologetic.

Google is flexible with lots of lateral motion in terms of project and ideas.   Ideas and cleverness will trump formal designations which are few anyway.   You can stand next to a top engineer worth tens of millions and a new hire and you can’t tell which is which – not even from the way they treat each other and certainly not from the casual dress or styles.    Google people are smart and confident, and generally very helpful and well-informed with the notable exception of questions about ranking quirks where transparency goes pretty much out the window.

Yahoo?   I think they *used to be* just like Google, but managed to mov in the direction of managerial bloat and questionable treatment of engineers several years ago.  They paid people well, but I think the focus moved away from search and engineering and towards a content and entertainment empire.  This was a mistake, and Yahoo’s about to to pay the price – they are about to get absorbed into the MS empire.    But don’t worry Yahoo engineers – they are not making much Soylent Green over there anymore.  Right Bill?

Ina on Gates

Disclosure:  Long on YHOO