Seven years ago new Disney (DIS) CEO Bob Iger had a princess problem. Michael Eisner, from whom Iger took the reins, had reestablished the Disney brand as synonymous with family destination resorts. Against all odds Eisner had also revived the once struggling film division with a string of hits produced largely by hand animation; a nod towards the company's history with a modern take.
What Disney didn't have were boy heroes. Peter Pan was and will always remain a boy but not one that little kids particularly want to be. Children recognize Mickey Mouse's general shape as though it were hardwired into their infant brains right next to the desire to breath, but little boys don't run into the backyard to play Mickey.
In the big picture Eisner had a cash cow of core businesses, a revived brand and absolutely nothing for little boys. If you want to run the Ultimate Family Vacation company you need more than Space Mountain.
What Iger could have done was go to the hand animation division with a demand to make male stars. After some middling success Iger realized something very, very smart: If he bought companies with the creative that he wanted and gave them the distribution and licensing they coveted, he'd have an immediate solution. All he had to do was not screw it up.
So it was that Iger bought Pixar in 2006 for some $6 billion. In the price Iger got a pretty sharp board member and a bunch of brilliant story tellers seemingly incapable of making female characters. Synergy!
Iger did it again with Marvel in 2009, paying $4.2 billion for a bunch of characters thought to be tired and overdone. This year my son dressed as Captain America for Halloween. We own, not rent but own, Captain America, Thor, Ironman and the Avengers on iTunes. The Avengers alone justified what Disney paid. (See Related: George Lucas Just Made $4 Billion Without Any VC Money)
The genius of Iger is sitting right there in front of us all, which is one reason I own Disney stock and have since the Marvel deal. But this isn't about Disney. It's about Microsoft (MSFT), Apple (AAPL) and other companies with a ton of cash and a bare cupboard in terms of new ideas.
Microsoft has the Disney problem. A core brand printing money and nothing cool to replace it. They can, and have, spent their money on bad acquisitions and have spent even more going in-house to tap into the zeitgeist. Their biggest success has been the Xbox. Microsoft owns the console space. When Halo comes out this month it will be the biggest video release in history, but it won't even move the needle in Redmond.
Microsoft needs to stop screwing around. If they want a foothold into what's on their customers' minds and what's working now, Microsoft needs to buy Twitter then leave it alone. No pop-up ads, no selling your information, no intrusion. No Facebook-ing. Just a bunch of people and their networks exchanging information on an open platform.
The information is worth billions to someone; not through conventional ads but as a platform for a bigger concept. Microsoft will be able to gather the users Facebook (FB) is losing in its quest to monetize. Microsoft has plenty of money. What they don't have is a pulse. They also don't have Twitter for the new Surface. They've got no real draw to bring users into the Microsoft tent.
Twitter is it. If Microsoft tries to "integrate" Twitter they'll screw it up immediately. But if they buy Twitter and largely leave it alone, just tweaking it enough to make it part of people's lives without all of the noise of being freestanding, it's impossible for Microsoft to overpay. (See Related: The Case for an Apple - Twitter Marriage)
Disney is up over 30% this year in a horrible economy. The reasons have nothing to do with Princesses and everything to do with Iger's willingness to innovate using other people's ideas. If Microsoft wants to stay relevant they need to do the same thing.