Kara Swisher

Recent Posts by Kara Swisher

Here’s the Story of a Worried Workforce…

So, reportedly Microsoft (MSFT) will have a town hall meeting for its employees today, in which execs will undoubtedly face questions about the still-unresolved Yahoo (YHOO) takeover battle.

They probably don’t need a meeting to know what’s up, because tensions and disgruntlement within the company are rising even more about the issue, especially in the wake of news this week that Microsoft has also prepared a generous $1.5 billion retention package to hold onto Yahoos in the event of a takeover.

Of increasing concern at Microsoft: Would the companies blend like the Brady Bunch? Or, as many worry, perhaps not so much.


Microsoft has about 79,000 employees, while Yahoo has just under 14,000.

“Reasons just keep piling on as to why we should not buy Yahoo,” said one mid-level Microsoft employee I spoke to. “It’s a bet a lot of people are getting more nervous about.”

And it is in that bet by Microsoft CEO Steve Ballmer–that it is in the fast-growing online ad industry rather than in the software business–that Microsoft’s future lies.

But, given it is the software business that has been the engine of all of Microsoft’s amazing growth over the years, it is obvious that many are dubious about such a dramatic shift.

Earlier this week, The Wall Street Journal reported on these tensions, which have been growing deeper as the deal drags on.

“We need to focus on Vista and its problems and making sure we continue to innovate in what we do best,” said another employee, talking about Microsoft’s powerful Windows franchise.

Much of the ire, which has been expressed vocally in a number of divisional meetings of late, seems to come most strongly from Microsoft’s powerful corps of software engineers and programmers.

They are more concerned with inroads companies like Google (GOOG) might make in the Web-based apps business, efforts aimed directly at the heart of Windows.

If resources are diverted to Yahoo, many think it will take the focus from Microsoft’s key businesses.

In addition, many employees outside the online services parts of Microsoft are unhappy that the one part of the company that has not gotten much traction against rivals is being rewarded by getting to make such an enormous bid.

The common sentiment: That online efforts, such as MSN, have been decidedly lackluster, but its execs are now rewarded with an even larger playground in Yahoo.

The biggest worry? That even more online resources will be squandered by the longtime execs who have been in charge of Microsoft’s online efforts.

“Yahoo’s leadership is obviously not going to stay and they have had trouble managing its business anyway and so has Microsoft,” said another employee. “So who is really able to lead something this big?”

With all the noise around this deal, it is perhaps the most important question of all.