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Apple, Yahoo raid rivals for key hires

(MoneyWatch) Companies try to turn almost everything into weapons to attack competitors. Patents, marketing and even supply-chain management have given corporations ways to block and even trip rivals. For example, Apple (APPL) has made masterly use of how it sources the components in its products to hinder other consumer electronics companies in getting the supplies they need.

Now Apple and Yahoo (YHOO) are using another competitive tactic: hiring. Both companies are poaching people critical to their competitors.

Raiding competitors for talent isn't a new concept in business, but in high-tech it's become a blood sport. For example, Apple snagged one of Samsung's top chip designers. Apple is forever in need of greater expertise in semiconductor design given that the company designs its own processors for the iPhone and iPad.

Enabling a breakup

Apple has put a lot of money into acquiring chip-design companies. But this latest hiring could be particularly beneficial, since Apple and Samsung are bitter rivals in the mobile space. Among other things, each has tried to use patent infringement claims to block the other's products from being being sold in various parts of the world.

But they have been tied together because Samsung has been one of the main component suppliers to Apple -- namely, semiconductors. Samsung has been the manufacturer for the Apple processors as well as a major supplier of memory and of the high-resolution Retina displays that have been an important selling point to consumers. The more understanding Apple can bring in-house, the better a chance it has to cut ties with Samsung, taking an enormous source of revenue away from the Korean firm and, as importantly, preventing its rival from having any hold over it.


If Apple has been surgical in its competitive hiring, Yahoo takes a broader approach as former Google executive and now new Yahoo CEO Marissa Mayer continues to emulate the search giant's strategy. This time, it's through hiring senior Google executive Henrique de Castro, who is currently in charge of advertising platforms, to serve as chief operating officer. Bringing more advertisers on board is key to Yahoo's success, as the company's growth has been flat-lining.

One question is whether such personnel raiding has the expected effect, both as a benefit to the hiring company and a detriment to the one losing a key person. The answer comes down to a combination of general principle and specific circumstances. People are often far more replaceable than many would like to think. Recruiting even a "word-class" expert away from a rival can is no silver bullet. Apple's hiring of the chip designer could have more practical impact given the relations with Samsung. But for Yahoo, boosting results on its site for advertisers is obviously more important than who runs the company's group.

In Yahoo's case, there is another question: Why does Mayer keep trying to recreate Google? The search giant has been enormously successful, but Yahoo will need to find its own strategy and approach, and not simply copy another company.

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