These are rotten times, economically speaking. In fact, there may be a couple of reasons to point to this being rotten times on a lot of levels. I’e never been known for my rosy outlook, but I do look at these times as quite exciting. Despite the economical downturn, in fact even because of it, as well as obstacles and threats there are also opportunities.
There is an article by Henry Blodget in the Silicon Alley Insider that explains how this could be advantageous times for Microsoft. Blodget writes that while others struggle to survive, Microsoft has the opportunity to buy its competition. I should add not only to buy its competition but those companies that in the long run would serve to make Microsoft stronger. Blodget writes, quite correctly, that Microsoft must then put the Internet based companies it buys under a single, umbrella branding in order not only only to gain optimum advantage but to keep from failing.
Reading Blodget’s article reminded me of my grandfather and his circle of friends and how during the depression they were among the few who were cash rich. Rather than try to hoard their assets, well they hoarded enough to cover themselves, believe me, they moved forward and bought up the competition and any assets they deemed beneficial in the long run. They bought these assets for cash and ins ome cases for pennies on the dollar.
I believe this type of thinking can apply to Microsoft and any other business out there with extra cash in pocket. Some may disagree and think it’s best to watch the dollar at a time like this. Others will see the wisdom, think in terms of the long run and make offers at what may prove to be bargain prices. Years from now, when this economic downturn is on the rebound, they could be the companies that profit the most.
Obviously, you got to be careful. Due diligence, coupled with specific corporate research is the mandate. And then there is the hiring. You will need to staff key executives. Those familiar with turnaround and restructuring. Do you background checks carefully on these folks. Make sure they can really perform and are not are not bunch of Wall Street guys who can do well only in the good times and will drive a company into the ground when generating profits is not like shooting fish in the barrel. There are some very capable senior executives out there. Despite the recent focus on MBA’s, which can be important, the more capable are supported with years of experience. Years, meaning they have been through harsher times and realize what is necessary to stabilize a business.
In the short run, you as the company owner may grimace when you have to produce the precious cash that allows you to buy both competitors and strategic assets. But years from now, or sooner, that grimace could turn into a nice big smile.
Check them out before you hire.
