Defining the Unlikely: Why Viacom Would Not Acquire Microsoft by 2021

Have you ever wondered about the potential of large corporations to undergo drastic changes, such as a major acquisition like Viacom buying Microsoft? While it's always exciting to speculate, the likelihood of this happening remains extremely remote. Let's dive into why a scenario where Viacom acquires Microsoft by 2021 is highly improbable.

Market Cap Analysis: A Basic Starting Point

The markets are always dynamic, but when we look at the current market capitalization (market cap) of the companies in question, things start to become crystal clear:

When comparing these enormous numbers, it's nearly impossible to imagine a scenario where a company like Microsoft, with its massive market cap, would agree to be acquired by a company that is significantly smaller. Instead, discussions like this often occur in reverse, with much larger companies acquiring smaller ones to expand their portfolios or enhance their market position.

Reasons for Unlikelihood

1. Pure Market Capitalization

Even if we adjust for various factors that could alter market caps in the coming years, the fundamental truth remains: Microsoft's market cap is more than 58 times larger than Viacom's. It would require a major shift in the industry or a significant change in the companies' strategic directions to make this acquisition even a possibility.

2. Business Alignment and Synergy

Acquisitions are not just about financial metrics. Both companies would need to find strategic and operational synergies that make this marriage viable. Given that both companies operate in vastly different sectors—media and technology—finding significant synergies could be challenging. For a company like Microsoft, with a focus on technology, software, and cloud services, merging with Viacom, a media company, would require a fundamental change in their core operations and strategic focus, which is not rational from a business standpoint.

3. Funding and Financial Feasibility

Even if there were a magical situation that could somehow normalize their market caps, it raises the question: who would fund Viacom's purchase? Acquiring a company of Microsoft's size would require an enormous amount of capital that is beyond Viacom’s financial means. Such a transaction would likely require external funding, which brings regulatory scrutiny and other challenges.

Conclusion: The Reality Check

While it's always fun to imagine the future and speculate about major changes in the corporate world, the cold, hard truth is that an acquisition of Microsoft by Viacom in 2021 is virtually impossible. The vast disparity in market caps, the lack of clear business benefits, and the challenge of funding such a transaction mean that major changes in company structure like this one are highly unlikely.

For the time being, both Viacom and Microsoft will remain in their current positions, each continuing to pursue their respective strategies in the ever-evolving global marketplace.