Winning (Chapter 14) Mergers and Acquisitions - Google, Youtube and Android

Merging is a very common way for large enterprise to gain world of synergies, industry convergence benefits or revenue synergies, cost savings and increase shareholder value. A successful mergers create a dynamic where 1+1=3. Jack Welch indicates 7 pitfalls for all the CEO to avoid these happenings.

1)      Who become the CEO / leader after the merged enterprise?

2)      Fail to assess cultural fit.

3)      Reverse hostage situation.

4)      Too timidly, a merger should be completed within 90 days.

5)      Conqueror syndrome, installs its own managers everywhere.

6)      Paying too much.

7)      Resistance from the acquired company’s people from top to bottom.

Several mergers cases are very successfully such as, eBay and Paypal, Google with Youtube and Android. Today, I pick up Android for the review of this chapter. Android is a mobile operation system. This company was purchased by Google in 2005. Google collaborated with Android and released the system to the world. Now, Android OS smartphone ranked first in US market.

To avoid the failure of cultural fit, Google let the Android development team Open Handset Alliance to cope with the hardware, software and telecom companies. The Open Handset Alliance is the founding team of Android, this team collaborate with other telecom companies to develop the open standards for mobile devices. Since Google is a search engine enterprise, it is difficult to develop mobile platform from its own. This action can avoid the failure of cultural fit. On the other hand, Google releases Nexus One, this mobile is used to complete with apple iPhone. This phone can be described as Android powered Google phone.

Another new feature of Android is Android market. This Android market is available from 28 August 2008. It is the official download location for applications and games for Android powered devices. The users can purchase applications which support 29 countries. In Nov 2010, around 160,000 applications are launched from Android. In the future mobile market, Android OS will develop applications with popular internet sites and services such as MySpace, Facebook and Twitter.

Jack Welch points out that mergers mean change. It is part of the growing process for large enterprise. Google avoids the 7 pitfalls, it can develop a new mobile phone Nexus One with Android. Android can develop its own OS with several mobile companies and new applications with popular web sites. It is a good example of 1+1=3.

Android 2.3 Official Video

Google Nexus One - Video Preview

Winning (Chapter 11) Strategy - facebook email from Mark Zuckerberg and Sheryl Sandberg

So many enterprises would like to develop the latest strategy for their portfolio, investment etc. In this chapter, I will discuss how to implement the strategy in process. Three main initial steps are the key principles which are:

1)      Come up with a big aha for your business, a smart, realistic, relatively fast way to gain sustainable competitive advantages.

2)      Put the right people in the right jobs to drive the big aha forward.

3)      Relentlessly seek out the best practices to achieve your big aha, whether inside or out, adapt them, and continually improve them.

According to the first chapter of Art of War, it is the chapter of laying plans which is similar to this chapter. Today, I pick up the Facebook  email account and I will introduce 2 persons in this chapter, the CEO of Facebook Mark Zuckerberg and the COO of Facebook Sheryl Sandberg. Mark Zuckerberg is an American entrepreneur who co-founded the social network Facebook. Sheryl Sandberg is the COO of Facebook, she used to be vice president of global online sales and operations at Google. She used to be in Google for 6 years until 2008.

On 15/11/10, Facebook introduces a modern messaging system. The new service incorporates chat, SMS and email functions to allow people to share however they want to share according to Facebook. The new firm is named as Titan and its message tool is broadcasted as Gmail killer. Mark claims that it is a convergent modern messaging system. The users can handle messages seamlessly across all the ways to communicate within a single inbox. This messaging service blends online chat, text messages and other real-time conversation tools with traditional email ( Microsoft’s Hotmail, Yahoo Mail and Gmail ). Facebook is applying its social networking strategy to prioritize messages from friends and family. The Facebook users won’t need to check all their email accounts. They can simply check 1 Facebook account and broadcast the message within an inbox click. This action can be incorporate more instant message on email messages and instant test messages on mobile platform. Thus it is more personalized and customized message service against the traditional email platform. With such a large user base, 500 millions Facebook users, the free personal facebook.com email account is a threaten signal towards Microsoft, Yahoo and Google.

The internet war depends on the user’s spending time. Google currently owns this honor but Facebook has proven that its addictive service can hold people’s attention for long period of them. Currently, Gmail is Google’s greatest social asset and it is the main hub of communication and social activity in Google universe. Mark finds out the competitive advantage against Google which is the Facebook fans page. People would like to share the instant message among their friends whom they know. Sheryl Sandberg introduces that email is a very slow message tool. Fans pages can be a powerful tool to find the friends whom they know and whom they don’t know in terms of internet adverting and marketing. Obviously, it is extremely valuable.

Jack Welch simplifies the strategy is to find out the right aha and set the direction, put the right people in place and work crazy to execute better than every one else, finding best practices and improving them everyday. To be honest, Mark Zuckerberg finds out instant conversation and social network will obsolete the traditional email service and marketing advertising. All instant conversation can apply in mobile platform. As web 3.0 is approaching, Mark seeks this demand in the future. He hires a very great person Sheryl Sandberg as the COO of Facebook to operate this strategy. Mark is concentrating on the program for web 3.0 everyday. He is a very good model for this chapter.

The social network

Facebook CEO Mark Zuckerberg

Facebook COO Sheryl Sandberg at Nielsen Consumer 360

Sheryl Sandberg, Facebook COO

Winning ( Chapter 7) People Management - Google management

In this chapter, Jack Welch lists up 6 rules for the company to manage people well.

1)      Elevate HR to a position of power and primacy in the organization.

2)      Use a rigorous, nonbureaucratic evaluation system.

3)      Create effective mechanisms – read: money, recognition, and training.

4)      Face straight into charged relationships with unions, stars, sliders and disrupters.

5)      Fight gravity, and instead of taking the middle 70% for granted.

6)      Design the org chart to be as flat as possible, with blindingly clear reporting relationships and responsibilities.

Google is known for having an informal corporate culture. On Fortune magazine’s list of best companies to work for, Google ranked first in 2007 and 2008. Today, this company employs 10,000 people around the world, receiving a C.V every 25 seconds.

Jack Welch introduces HR is on track, pastor-parents. Since they can help managers build leaders and careers. Laszlo Bock serves as Vice President, People Operations of Google Inc. He used to be an Engagement Manager at McKinsey and Company, serving clients in the technology. His client work also extended to broader business growth, a compensation consultant as Hewitt Associates. Laszlo Bock has the skill to settle the crisis, channel anger, forging compromises.

If you go to visit the Google management in this link: http://www.google.com/corporate/execs.html#msmith

You will find out a clear organization chart of this company. All the persons in each level have their own responsibility and relationships. Every employee in Google understands whom they reported to, who reported to them. A good organization chart can reduce the confusion for every piece of information travels through the layers.

The Googleplex is the corporate headquarters complex of Google. It is an employee-friendly enviroment to work.  This building contains swimming pool, free food in eleven catdterias. Free fruit drink dispensers are everywhere for employees and guests alike, no coins or credit cards required. The Googlers wear jeans, t-shirts, sweaters and even show up in pyjama bottoms.

To work off the pounds, and the stress, Google has its own state-of-the-art gym right on campus offering weight-training and a host of exercise machines, rowing machines, lockers and shower rooms.

For workers spending long hours in front of computers, or to just work out the kinks, there are massage rooms with professional. The employees can play pool, video games, ping pong, football, pinball machines in the middle of the day.

The top management structure of Google, Larry and Sergey account for the success of the 20 percent projects. The employees are able to utilize 20 percent of their time to pursue projects which interest them. Google provides a new way to cultivate ideas internally and utilize the power of creativity. Many new features have been started as employee projects. New ideas came out such as Google News, Froogle, Google Reader etc.

According to 2008 of the astonishing revenue, each employee from Google is $210,000 per year. In fact, the salary range of from Google is higher than other I.T company.

Jack Welch indicates that the managers should really know how the employees are doing, provide great reward, motivate and retain wisely with money, recognition and training. Once you have hired great people, your job becomes managing them into a winning team.

Google Recruitment Video

An Inside Look at Google - Working at Google