There seems to be widespread angst, especially in India’s business circles, each time President Obama steps up his anti-outsourcing rhetoric. Our software industry was quick to respond, crying foul after President Obama’s state of the union speech in which he said, “It’s time to stop rewarding businesses that ship jobs overseas, and start rewarding companies that create jobs right here in America.” Not to be left behind, our politicians joined the chorus of disappointment. “Protectionism ultimately does not help the country that resorts to protectionism,” lectured our Finance Minister, Pranab Mukherjee.
Firstly, Obama’s anti-outsourcing job campaign was directed mainly towards manufacturing jobs that have migrated to China. While anti-outsourcing legislation might certainly affect India, the impact is likely to be far greater on the manufacturing sector than on IT services. To put things in perspective, let me recount an anecdote. A friend of mine who lives in Michigan said that a man approached him while he was mowing his lawn and asked him if he could work for him as his gardener. My friend agreed, and over time, got to know him better. It turned out that this man was a middle manager at one of the big car companies. He was in his mid-forties, had worked for over twenty years for the same car company, had two school-going kids, and had been out of a job for over six months. He had joined the company fresh out of school and had worked his way up to the middle management level. In other words, he had dedicated the best years of his life to the car manufacturing industry. After over twenty years of serving the company, he was laid off along with several colleagues, and as luck would have it, there were no matching jobs available in the area.
Click here to read the rest of the article in The Economic Times
Yahoo! is shooting in all directions hoping that something falls from the heavens. First it was Google, then it was News Corp., then it was AOL. In short, anyone but Microsoft. But as the deadlines nears and Microsoft and Yahoo try their best to outsmart each other, the battle lines appear to be re-drawn all of a sudden. The mighty News Corp. appears to have joined hands with Microsoft while Yahoo has teamed up with AOL and simultaneously announced an ad deal with Google.
At the moment though it looks like Yahoo will do a deal with any company that wants one! If you put the numbers aside, the Yahoo-AOL merger can be a good one. Both companies are quite lost and desperately in need of new direction. AOL more so, than Yahoo. An merged company with new leadership could keep Wall Street off their backs for a year and half at the least. This could give the companies’ some time to get their act together in the midst of the overall downturn in the market.
The Microsoft-News Corp. combination is bound to be hard to fend off. It would be sad to see Yahoo disappear to an acquisition (my earlier analysis not withstanding) . But at this point, the game is far from over. In fact, it might just be the beginning of a long battle provided Yahoo can turn in some decent quarterly numbers later this month.
Google is growing from strength to strength. A lucrative advertising industry is at stake. Yahoo’s Panama might have been an improvement over what Yahoo had before, but its in no way strong enough to pose a challenge to Google. Besides with the recent management exodus, the peanut butter memo-gate, the none to impressive quarterly results, and a shaky top management, Yahoo has hordes of challenges at hand.
As for Microsoft, their search and advertising strategy is simply way behind. It is struggling to get a foothold in this space and with each passing day, Google is expanding its presence and reach, thanks to its growing dominance of the search market. For an advertiser, the default choice is to advertise with the network that has the greatest audience. Moreover, once you start using Google Adwords and get familiar with it, you need something more compelling to change. It is almost like Microsoft’s hold over the desktop but certainly not there yet. But unless, the Yahoo-MS move fast, Google is going to be even harder to dislodge from a potentially huge advertising market.
So do two losers in the search and advertising market make a winner? Probably not. But at least it will pose a bigger challenge to Google, provided they can get over the integration issues that are likely to come with so much product/service overlap.
Check out stories on this news in the WSJ and the NY Times.
There was an article the Mercury News the other day about a home furnishings company by name Divine Designs. Its a great story about an Indian immigrant who was into Home Furnishings as a hobby. She started her business after she re-decorated her home with custom drapes and caught the interest of friends to start with and then slowly expanded beyond that rather organicaly. In the midst of all the conventional hi-tech stories that make the rounds in Silicon Valley, its great that the Mercury News has chosen to highlight an off-beat, yet fascinating success story.