Friday, December 16, 2016

Verizon is building a wall - regarding the Yahoo deal

Since walls are really cool these days, especially if someone else pays for them, I figured that I'd talk about them.

But I'm going to talk about a different type of wall - a logical wall that can be erected between two companies, or even between two parts of the same company.

Let me jump back to 2008, and to a personal example. In late 2008, I was working for Motorola's Biometric Business Unit when I learned that Motorola wanted to sell this unit to a company called Safran - pending government approvals.

Now some would expect that once the announcement was made, all of the Motorola employees and all of the Safran employees would all get together and start talking about how things would work once the deal went through.

As Donald Trump would say, "WRONG!"

All of us Motorola employees were strictly cautioned that the deal might go through, or it might not. Until the deal actually went through, we were to consider Safran employees as competitors, just like we always had.

I had no idea what the Safran employees were told - again, I wasn't talking to them - but presumably they were told the same thing.

In fact, during the next few months, Motorola and Safran actually submitted competing bids for several opportunities, continuing the fierce competition month after month after month.

Several months passed, and the deal wasn't finalized yet. It was probably February 2009 when I went to a conference at the National Institute of Standards and Technology - a conference that was also attended by a Safran employee.

During a break in the proceedings, the Safran employee and I had a conversation. It went something like this.

Have you heard anything?

I heard that the deal may get done this month.

That's what I heard too.

Of course, I previously heard that the deal might get done LAST month.

Yeah, that's what I heard too.

As it turned out, the deal didn't get done in February. Or in March. Finally, on a day in early April, we at Motorola officially heard that we no longer worked for Motorola any more (and could you kindly give us our batwings back please?). Only after that could all of us work on the reorganization.

Fast-forward to the Verizon-Yahoo deal - which like all deals of this type, may or may not happen. With the most recent revelations about a billion Yahoo accounts being hacked, the chance of the deal not happening is increasing.

So Verizon has to plan for the possibility of acquiring Yahoo, and thus getting confidential information about how Yahoo operates. At the same time, Verizon has to plan for the possibility of not acquiring Yahoo, and needs to consider the ramifications of the purchase WITHOUT access to that confidential information.

So how is Verizon doing this? By creating two separate teams and walling them off from each other.

While a Verizon group led by AOL Chief Executive Officer Tim Armstrong is still focused on integration planning to get Yahoo up and running, another team, walled off from the rest, is reviewing the breach disclosures and the company’s options, said the person, who asked not to be identified discussing private information.

This is different from the wall that was enforced between Motorola and Safran between 2008 and 2009. In the earlier case, we were talking about two separate companies. In the Verizon case, we're talking about walling off two different groups WITHIN THE SAME COMPANY.

As it turns out, I've actually had experience with walls within a company.

But that's a Motorola trade secret.

One that I'm not allowed to disclose to Safran.
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