Microsoft closes $6 billion Aquantive buy

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On Motly Fools and Virtical Intigration

Any university level course on math of finance or stock investing will lead the student to question Virtical Integration, which is what the Aquantive buy is all about. If memory serves me right Aquantive use to count Microsoft as one of its biggest clients. This was before the Yahoo era.

The theory is that individual investors or their brokers can create vertical integration themselves. They do not need the assistance of corporate executives at Microsoft to put together a stock portfolio which provides the same benefits being hoped for with the Aquantive buy.

My sense is that brokers may not be including Microsoft in the portfolios designed for vertical integration as much as they may have in the past and to compensate Microsoft management is being encouraged by shareholders to become brokers and do it themselves. The alternative is to distribute dividends which trigger tax consequences for none-US-citizen shareholders.

The problems are well known. Aquantive, no longer benefits from the discipline of competition. The arms length dealing between what would become its biggest client and its management shareholders no longer exists. Aquantive staff are forced to utilize Microsoft tools rather than the best available and become less efficient.

Its an opportunity for former Aquantive employess to hang out a shingle. American Programmers are becoming the top profession in the USA because of developments such as the Aquantive deal. In the final analysis of a service oriented company - its the doers that count. They can do better service for their clients by using tools that adhere to industry standards. Microsoft management will have trouble retaining them with out paying a premium salary.



I look for an exodus.

Posted by: mighetto   Posted on: 08/13/07 You are currently: a Guest | Members login | Terms of Use

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