His argument for Google/CBS is quite sound. I happen to agree that CBS has built up a hell of an offline advertising delivery business (with solid television, print and outdoor advertising businesses). Google could drive advertising automation in each of these businesses and really solidify itself as a one stop shop for brand development. Oh, and they have pretty neat software too.
However, the Microsoft/Amazon thing is so ill conceived that I had to address it here. Here is the core of Adam's argument:
"If Microsoft were to buy Amazon, they would be in an excellent position to push the cloud computing concept even further ahead. In remaining the dominant desktop OS, Microsoft still in reality has the largest developer community – developers that are also thinking long and hard about how to move their applications off the desktop and into the cloud. There are also the tens of millions of small and medium sized businesses that are currently Microsoft customers that are without a web strategy - Amazon Web Services fits perfectly into serving this segment too.First, let's be clear that the retail business would have to be spun off quickly. Not only (as Adam points out) does Microsoft not need to enter retail (e.g. their failed attempt at a showcase store in San Francisco's Metreon), but Amazon's retail side requires a skill set that really wouldn't interest Balmer in the least. Let's not even get into conflicts of interest in customer support, etc.Finally, let us not forget Google is already moving in this direction too with App Engine. Microsoft needs to make a play in this space – and Amazon is the quickest way to do so (in addition to adding a company that grew revenue from $10.7 to $14.8 billion last year)"
I think the bigger issue, though, is that the Amazon team responsible for making the web services business work do not seem at all interested in ditching open source for a single vendor OS solution. If Microsoft were to acquire Amazon for the web services business (especially EC2/S3), I believe they would lose the team that knows how to make that business happen. Frankly, I don't see that Mister Softy has the talent to further that model themselves.
(If they do, they why the hell don't they counter EC2 with a Windows friendly service, instead of targeting the consumer-happy Mesh concept?)
And, finally, how many times must it be said that Google App Engine is not a direct competitor to Amazon EC2/S3? The very fact that you can get a GAE clone to run on Amazon, but not the other way around, should tell you something about the two markets. (Not to mention that observation that MySQL will probably NEVER run on GAE.) GAE is a PaaS play, Amazon EC2/S3 is an IaaS play. Period. I believe that Google and Amazon still have the capacity to be very close partners in the cloud computing space over the coming years. It probably won't happen, but the capacity is there.
If Microsoft wants to capture compute capacity, I'd say Rackspace is a better target. Huge player, with both Linux and Windows friendly services, Mosso for a cloud, and no core business functions that are outside of what Microsoft would specifically be looking to acquire. An outstanding customer base that actually wants to directly interact with its vendor (providing MUCH better upsell opportunities to MSFT), and some serious hosting expertise.
I know it was fun to think about two big consumer names perhaps marrying in the deal of the decade, but c'mon Adam. If Microsoft backed away from the cultural and business incongruities of the Yahoo deal, why would they willingly seek out a larger problem in Amazon?
Update: It does occur to me, in Adam's defense, that if Amazon were to voluntarily spin off the AWS business into a separate company, that the economics would change for Microsoft. How interested Jeff Barr is in doing this remains to be seen, though.
