I’m no particular fan of Henry Blodget but he’s clearly articulate and smart, savvy even. I wouldn’t go all gaga just yet a la motley fool and have him advise on my portfolio—if indeed he’s technically allowed to. But I do agree with some of his pronouncements and I think he’s bang on about Microsoft, Yahoo and the Cloud

Microsoft is becoming the new IBM. And if Blodget is right, and I think he is, they would have decimated Yahoo and destroyed $billions of value in the process. Yahoo’s assets are its people and their continuously evolving products. The two are inseparable and the loss of key product and engineering staff would have left Microsoft with a quickly atrophying asset. A mass exodus would have been an almost certainty given the cultural gulf between the organizations.

One of the key difference between them is that Microsoft’s revenue is not coming primarily from the consumer web space whereas Yahoo’s is. Microsoft’s corporate customers are much less fickle than the web audience served by Yahoo, Google et al. The latter are already fully in the cloud with all the concomitant benefits and disadvantages that brings—-notably that by giving the customer genuine agility, you now have earn their loyalty every day if you want to sustain a revenue stream from them.

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