Saturday, February 2, 2008

A merger of equals

On Friday -- the day after Sen. Barack Obama and Sen. Hillary Clinton sat down in Los Angeles and conducted the most civilized debate of a fractious Democratic campaign; and four days before Super Tuesday's cash crop of delegates -- we heard tantalizing rumblings, loose talk of something that's been up til now off the table of possibility.

Merger talk was already in the air. Friday's announcement of a proposed union between Microsoft and Yahoo! had the business world dizzy discussing the what-ifs of such a juggernaut in the Internet space. And the prospect of other mergers have been bandied about for weeks: Airlines (Delta is said to be "in talks" with either Northwest or United). Pharmaceuticals (the Wall Street Journal Online speculated late last year about a possible marriage of Pfizer and Wyeth). Carmakers (Fortune magazine recently suggested a possible union of Ford and Chrysler).

All of which, in the heat of an intensely fought political year, raises a question for two equally matched structures in the world of political business, both of whom are on the cusp of something truly transformative: Since you're both clearly going to make history ... why not make history together?

The idea was first (or most recently) aired in a KIRO-TV interview with Sen. John Kerry, who came to Seattle in advance of the Washington state caucuses and the state's Feb. 19 primary. Kerry rightly demurred, having already thrown his weight behind the Obama campaign. But it's hard to imagine that KIRO political reporter Essex Porter asked that question in a theoretical vacuum. And considering the intensity and bloodletting of the campaign still to come in the fall, against the juggernaut of the incumbent party, speculation about a merger of political equals might be in order.

Consider the following:

Economies of scale: What has been proven to work for other businesses may well have the same effect for two exceedingly efficient political entities. In the case of a proposed Clinton-Obama merger, the output of its anticipated production units – votes – would likely increase by joining forces, consolidating many of their separate operations. In the business of politics as in other fields of professional endeavor, the two combining companies could each anticipate exponentially greater leverage than either could hope to achieve on their own.

Cash flow: The Clinton and Obama operations jointly raised more than $100 million last year; Obama raised an estimated $32 million in January. Clearly, since both campaign balance sheets are solidly in the black, operating expenditures of each concern should create a formidable force if Clinton and Obama were to effect merger.

Cultural integration: Since both operations are comprised of a cross-section of the American public – spanning races, ethnicities, religions and both genders – integration of cultures would not be expected to be problematic to a proposed merger. Such a union would be highly beneficial in attaining the necessary critical mass of awareness needed to prevail in the election of the parent company's officers in Q4.

Mission statements: Despite a recent history of conflict between the principals, there is a very real chance that differences between the two concerns can be reconciled by the time of the election of parent company officers in Q4. The mission statements of Clinton and Obama are closely enough allied – a return of the Democrats to power – that other distinctions in execution and strategy can be easily resolved.

Online strategies: For outreach to shareholders in order to express statements of policy, and for purposes of further capitalization, the online strategies of both the Clinton and Obama operations are similarly well-positioned.

The bigger unresolved question, of course, is how to brand the resulting combination. Should the resulting entity be (using the typographical ligatures corporate America is fond of) ClintonObama or ObamaClinton? This could be the big sticking point. It is expected that the managements of both operations will reach an accomodation in advance of Q4.

We may have some idea of the viability of such a merger of the Obama and Clinton subsidiaries when shareholders of the parent company – the United States of America – cast votes in the first joint annual meeting on Tuesday, Feb. 5. Shareholders are urged to attend.

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