Letters to the Editor
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Sage advice
Which MS will absolutely not follow.
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idiocy
Farhad will you never, ever admit that you are simply an anti-Microsoft partisan? You know nothing about business and embarass yourself when you try to write about it. Can't you see through your bias at all?
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Good advice for the most dishonest and dishonorable computer company in America.
the headline's the thing.
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the problem with a company as big as Redmondsoft
Is that in order to grow the stock value you have to grow the equivalent of a Fortune 200 company from scratch every year. That's not a simple proposition. So you have to grow by acquisition. Which again, leaves few companies worth it.
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Buying Startups
Your comment that "With just a fraction of that $44 billion, you could invest in dozens of start-ups that could yield a bigger pay-off than Yahoo." is interesting. Once bought, such startups stop being startups and start being Microsoft. I don't think Microsoft is capable of a "grand idea."
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@Freddie
Did I get something wrong? Which part of this piece should embarrass me?
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Microsoft Bad. Apple and Google Good.
Choice quote:
"You don't need to be in the Internet ad business. You are a software company. That's what you do, that's what you've always done, that's what you can continue to do, and probably well, and probably for a good bit of money."
Awesome analysis. Now tell Apple that's it's foolish for them to get into the music and phone business.
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Crazy little thing called negotiation
Yahoo did not reject MSFT's offer. They made a counter-proposal of $40 a share, basically. This was pretty much every business writer predicted, and most analysis I've read puts the probabilty of a deal fairly high.
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@Mike
Why, has Apple done poorly in the music business for more than a decade?
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Totally Puzzled
When I look at the MS/Yahoo buyout attempt, I'm kinda puzzled. I had the opportunity to check out some of MS's next-generation devices and software last year and was pretty impressed with some of their developments. Sometimes I suspect that their best and brightest are looking far ahead and that may be the reason why some of (most of?) their current mainstream efforts are so crummy.
Even keeping the next-gen stuff in mind, I just can't get my mind wrapped around the buyout. Is it just a maneuver made out of fear of Google's (well earned) maverick status? I dunno.... I'm just really confused by this move....
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Farhad -- sorry, I was trying to be sarcastic
First let me just say ... thanks for responding!!!
I didn't mean Apple has done bad in the music business. I was sarcastically pointing out that you said M$oft should stay in software, where they succeed, and stay away from the "Internet ad business." That's like telling Apple (pre IPod and IPhone) to stay away from the music and phone business because buidling computers is their strong point. We all know in the end it worked for Apple, and, at least by that thin logic, could work for MSoft.
BTW it should be noted that Microsoft is a massive company who's fingers are in many pies, and just a few years ago jumped into the game consol business -- though I think it's too early to say if that will be a success or not. Regardless large smart companies try to diversify -- like Google getting into wind energy.
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Xbox isn't the first time...
... that MSFT has jumped into the game console business.
Harken back to 1994. Remember Modular Windows? MSFT sold boxes with stripped-down Windows 3.1 clients on them through Radio Shack.
The reason you don't remember is that Modular Windows was an even bigger flop than Microsoft Bob.
All that said, they seem to have done a great deal right w/Xbox. Whether they can make that pay off (they're still selling the boxes at a substantial loss, I believe) is still up in the air, which is more than I can predict for Zune.
Basically, Robbie Bach is the industry's foremost expert on strategically losing money.
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MSFT & Yahoo
The difference is: Apple's success depends on innovation. Microsoft's doesn't. It's a business model thing.
I think Farhad's first post on this was right on... the melding of two waning giants is not a recipe for innovation, or success.
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Would Microhoo be X-Box or BOB?
MS is kicking ass in the game console arena. Yes, they sell the units at a loss. So does Sony, believe it or not. The money is in the games. Just like HP sells its inkjets at cost. The guy who started all this at MS had a 6 year plan, and they are right on schedule. End game is that Sony leaves the game console market forever, which seems like it could actually happen - next gen X-box arrives in about a year and a half, PS4 is 5 years away now if they ever build it. The design cycle is the key, and Sony can't keep up. PS4 will actually be 2 generations behind by the time it hits the shelves.
There is a problem with them sticking to being a software company - they can't grow very much. All the real growth in that market is with people who can't afford to spend much on a computer or who live in countries that ignore software piracy. Unless something truly new comes along, and we've been waiting for that for 5 years now, the computer industry is basically mature. The internet is maturing as well, and there are a finite number of clicks out there. If Google keeps 65% of them locked up, which is possible but I think unlikely, the only way to grow share is through acquisition.
BTW, Yahoo did not simply make a counteroffer. They ran to AOL/Time-Warner of all places looking for a white knight. If there is anyone in the world who could completely fuck Yahoo! up it's those guys. Gates and Balmer probably can't stop laughing. If Yahoo! does sell to those guys, MS gets to pick up a substantial chunk of their market share when they tank (and tank they will) and keep their $44 billion. Maybe they planned it this way.
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@Mike Wood
I think Farhad got that you were being sarcastic. The point his question makes is that your analogy between criticizing Apple's music business and criticizing MS's Web Portal/Search Engine business is a bad analogy. If MS were just now starting to get into the web portal business, then you'd have a good point that claiming they won't succeed would premature. However the fact is that over the last 10 years Apple has demonstrated their success in the music business, and MS has demonstrated their lack of success in the portal/search engine business. That's why your analogy was flawed.