Is Microsoft bidding up acquisitions on purpose?

Don Dodge, who works at Microsoft, offers up some interesting analysis of Google and Microsoft’s acquisition strategy. Not saying I agree with it, but it does make for fun Sunday-morning reading.

Oh, there’s plenty of “paying more later” behavior on every side of the fence. Microsoft certainly has a “we can build that ourselves for less” kind of attitude in its halls that is still proving to be ineffective in the Web 2.0 space.

The thing I see in common between YouTube and DoubleClick is that Google is buying a moat around its search engine advertising business. Google doesn’t want there to be ANY reason you’ll think of going with another advertising company. They are spending billions to protect their core business: contextual advertising delivered to search engine users. Since Microsoft doesn’t currently need moats (its core businesses, Windows and Office, have no real competitors left anymore that’ll try to jump the castle walls) Microsoft is willing to drop out of such deals when they get too rich.

Are there any moats left on the block? I don’t know of too many more. News Corporation? (Owner of MySpace?) Too expensive. $74 billion market cap. Yahoo is only $42 billion.

I just went back and read the email reply that Steven Sinofsky sent me back in February 2005 (I asked Microsoft to buy Skype, Bloglines, SixApart, and Flickr, among others). Steven used the words “business value” 13 times (he couldn’t see it in what I was advocating). Flickr was purchased by Yahoo a few weeks after that email. Skype went to eBay in October. Bloglines went to Ask a few weeks before my email.

The email makes it very clear that Microsoft’s leadership isn’t willing to pay big bucks for things that don’t have clear business value. Don is quite right that at some point it’s hard to discern business value in acquisitions. Microsoft has been quite consistent in turning down best-of-breed deals because they get too expensive. Google, on the other hand, is seeing value in these things in the future.

It makes for an interesting contrast, that’s for sure.

Which strategy is best? The conservative Microsoft approach? The rock and roll Google approach?

Comments

  1. If the Xbox Marketplace and Zune Marketplace can gain some marketshare – it would be a blow for Google as they do not have access to those zones.
    Wouldn’t it be prudent to invest those billions there?

    Same goes for the iPhone, etc.

  2. If the Xbox Marketplace and Zune Marketplace can gain some marketshare – it would be a blow for Google as they do not have access to those zones.
    Wouldn’t it be prudent to invest those billions there?

    Same goes for the iPhone, etc.

  3. Google gets 10 years of Doubleclick data to feed into their algorithms. The end result is a yet smarter solution to offer advertisers, and in turn more deeply relevant delivery of advertisement to consumers. I wouldn’t be terribly surprised if the Doubleclick data on visual ad impressions doesn’t hold value for Google’s nascent television ad sales business.

    Expensive, possibly. Smart, definitely.

  4. Google gets 10 years of Doubleclick data to feed into their algorithms. The end result is a yet smarter solution to offer advertisers, and in turn more deeply relevant delivery of advertisement to consumers. I wouldn’t be terribly surprised if the Doubleclick data on visual ad impressions doesn’t hold value for Google’s nascent television ad sales business.

    Expensive, possibly. Smart, definitely.

  5. Some accuse Google of buying DoubleClick (and perhaps) YouTube so it didn’t fall into MSFT’s hands. Why doesn’t MSFT have that same attitude? They’ve got billions in the bank, and their own developed stuff is hardly a threat, so why don’t they have a “at any cost” attitude to prevent Google from further increasing its lead?

  6. Some accuse Google of buying DoubleClick (and perhaps) YouTube so it didn’t fall into MSFT’s hands. Why doesn’t MSFT have that same attitude? They’ve got billions in the bank, and their own developed stuff is hardly a threat, so why don’t they have a “at any cost” attitude to prevent Google from further increasing its lead?

  7. Words for advise:
    The skills that Microsoft has hired in Seattle for past 10 years are not in the Web 2.0 wave. If the executive team is not living in the Silicon Valley, it is hard to see that the other party is hiring the most qualified top dogs on web developers with the latest Web 2.0 skill. Possible strategy: be friend with local web organization and make your hiring managers “cool”, “hip hop” and “socialable”. Place hired in building near Palo Alto and give them startup “star” treatment. Don’t judge on age, type of degree, appearance and those out-of-trend “Microsoft-Only” certificates but do focus on their ability to compete.

  8. Words for advise:
    The skills that Microsoft has hired in Seattle for past 10 years are not in the Web 2.0 wave. If the executive team is not living in the Silicon Valley, it is hard to see that the other party is hiring the most qualified top dogs on web developers with the latest Web 2.0 skill. Possible strategy: be friend with local web organization and make your hiring managers “cool”, “hip hop” and “socialable”. Place hired in building near Palo Alto and give them startup “star” treatment. Don’t judge on age, type of degree, appearance and those out-of-trend “Microsoft-Only” certificates but do focus on their ability to compete.

  9. Here’s my take on all this for better or worse…

    Google is decidely narrowing its focus, which is a good thing. Focused business tend to make money. Google has a couple of core offerings and they are focused on those.

    Microsoft tries to be everything to everyone and is spreading themselves too thin. One poster in another post mentioned that MS needs to focus more on services. I agree. They could easily take Office and other core competencies and really clean up in the enterprise space. They won’t because they are too caught up in keeping up with Google and Yahoo. Big mistake.

    While I personally NEVER click on the ads I do see (I try and block most of them), I can see no reason to not build a business on it. I just won’t participate.

    I think Google is going to own the ad space almost entirely here soon. Ask, Yahoo, and MS will be taking the table scraps left over from the Google ad feast. Usually only one player does exceptionally well in a given market, while the others just trail along.

    I think Google is also doing this to shore itself up as a means of damage control. They are predicting alot of brain drain here in the near future. They have already lost some pretty key players, including the people that came up with adwords and its algorithms. People are millionaires there and they are realizing they can retire and get out of the workplace insanity.

    MS seems to be doing what it has always done, which is wait until it’s almost too late. Remember the Internet. Remember online music, remember decent operating systems. MS entered into all of these markets and with the exception on IE, has played second fiddle to the top dog. IE only has the market share it does because of bundling, and even now is losing share weekly to Firefox. If people ever woke up to Opera, they’d lose even more.

    MS doesn’t really innovate like Google. They buy their talent. Look at Great Plains, DOS, etc. MS has talented people, but the leadership at MS is stagnant and old-fashioned. They are like the bankers on the WAMU commercials who refuse to give people what they want. Vista is doing horribly compared to the launch of XP. My mother is thinking about going back to the Mac because her new laptop with Vista is slower than XP was, despite having more RAM and a faster CPU. She even wrote MS a letter bemoaning this fact. My dad, too, is going Mac after his current laptop gives up the ghost.

    All in all, I don’t like Google, and I don’t use their services, but my money is one them and the players that focus on their core competencies.

  10. Here’s my take on all this for better or worse…

    Google is decidely narrowing its focus, which is a good thing. Focused business tend to make money. Google has a couple of core offerings and they are focused on those.

    Microsoft tries to be everything to everyone and is spreading themselves too thin. One poster in another post mentioned that MS needs to focus more on services. I agree. They could easily take Office and other core competencies and really clean up in the enterprise space. They won’t because they are too caught up in keeping up with Google and Yahoo. Big mistake.

    While I personally NEVER click on the ads I do see (I try and block most of them), I can see no reason to not build a business on it. I just won’t participate.

    I think Google is going to own the ad space almost entirely here soon. Ask, Yahoo, and MS will be taking the table scraps left over from the Google ad feast. Usually only one player does exceptionally well in a given market, while the others just trail along.

    I think Google is also doing this to shore itself up as a means of damage control. They are predicting alot of brain drain here in the near future. They have already lost some pretty key players, including the people that came up with adwords and its algorithms. People are millionaires there and they are realizing they can retire and get out of the workplace insanity.

    MS seems to be doing what it has always done, which is wait until it’s almost too late. Remember the Internet. Remember online music, remember decent operating systems. MS entered into all of these markets and with the exception on IE, has played second fiddle to the top dog. IE only has the market share it does because of bundling, and even now is losing share weekly to Firefox. If people ever woke up to Opera, they’d lose even more.

    MS doesn’t really innovate like Google. They buy their talent. Look at Great Plains, DOS, etc. MS has talented people, but the leadership at MS is stagnant and old-fashioned. They are like the bankers on the WAMU commercials who refuse to give people what they want. Vista is doing horribly compared to the launch of XP. My mother is thinking about going back to the Mac because her new laptop with Vista is slower than XP was, despite having more RAM and a faster CPU. She even wrote MS a letter bemoaning this fact. My dad, too, is going Mac after his current laptop gives up the ghost.

    All in all, I don’t like Google, and I don’t use their services, but my money is one them and the players that focus on their core competencies.

  11. I may be wrong, but one thing I noticed about Microsoft (from following the Xbox brand) is that they seem to shy away from doing the thing that will put them over. If that makes any sense. It seems like (with the Xbox anyway), they will get a little momentum, and get an opportunity that will win a major battle then they will back off. I’m guessing its the same thing as your saying, where they rather build things themselves for less money, it just gets too expensive.

    Early in the Xbox live (the original) they got a little momentum…they sold pretty decent out the gate, then there were some game companies and/or franchises that were rumored to be available for purchase. I felt like if MS would’ve jumped on some those purchases (if they were indeed real), it would’ve capitalized on the momentum they were getting. But nothing ever happened….EA bought a few of them, some of them just went away.

    I always figured they were just being careful with their image. Trying to keep with the new “nicer look” that they have been trying to portray. and going around buying up everything wouldn’t help that image

    I admit, some of these are indeed bad buy’s but sometimes the purchase itself, whether its a good buy or not, can still give a little boost to mindshare…I think, but I’m not an analyst or anything

  12. I may be wrong, but one thing I noticed about Microsoft (from following the Xbox brand) is that they seem to shy away from doing the thing that will put them over. If that makes any sense. It seems like (with the Xbox anyway), they will get a little momentum, and get an opportunity that will win a major battle then they will back off. I’m guessing its the same thing as your saying, where they rather build things themselves for less money, it just gets too expensive.

    Early in the Xbox live (the original) they got a little momentum…they sold pretty decent out the gate, then there were some game companies and/or franchises that were rumored to be available for purchase. I felt like if MS would’ve jumped on some those purchases (if they were indeed real), it would’ve capitalized on the momentum they were getting. But nothing ever happened….EA bought a few of them, some of them just went away.

    I always figured they were just being careful with their image. Trying to keep with the new “nicer look” that they have been trying to portray. and going around buying up everything wouldn’t help that image

    I admit, some of these are indeed bad buy’s but sometimes the purchase itself, whether its a good buy or not, can still give a little boost to mindshare…I think, but I’m not an analyst or anything

  13. Could it be that Microsoft focuses on the value of the code, while Google focuses on the value of the data? Is everything that Google knows about me plus (or is it times?) everything that DoublClick knows about me worth something?

  14. Could it be that Microsoft focuses on the value of the code, while Google focuses on the value of the data? Is everything that Google knows about me plus (or is it times?) everything that DoublClick knows about me worth something?

  15. @8

    Another reason to surf while blocking ads, no referrer logging, original cookies only, etc.

    The “data” is worth a lot of money, but thank God there is NOTHING about me on the net. I do a vanity search for myself, my former employment, people’s blogs I know, etc. I have yet to find any reference to myself on the net.

    This was mentioned to me once by an employer. I told them I take great pains to keep my private life private, and I do.

    The less companies know about me, the better. It’s bad enough the government knows I exist.

  16. @8

    Another reason to surf while blocking ads, no referrer logging, original cookies only, etc.

    The “data” is worth a lot of money, but thank God there is NOTHING about me on the net. I do a vanity search for myself, my former employment, people’s blogs I know, etc. I have yet to find any reference to myself on the net.

    This was mentioned to me once by an employer. I told them I take great pains to keep my private life private, and I do.

    The less companies know about me, the better. It’s bad enough the government knows I exist.

  17. Bess If the executive team is not living in the Silicon Valley, it is hard to see that the other party is hiring the most qualified top dogs on web developers with the latest Web 2.0 skill.

    What on earth does that mean?

    wreck MS doesn’t really innovate like Google. They buy their talent.

    I’m not sure what you mean by “innovation”

  18. Bess If the executive team is not living in the Silicon Valley, it is hard to see that the other party is hiring the most qualified top dogs on web developers with the latest Web 2.0 skill.

    What on earth does that mean?

    wreck MS doesn’t really innovate like Google. They buy their talent.

    I’m not sure what you mean by “innovation”

  19. @15,

    MS has bought some companies/products that were/are innovative. What I mean is simply, MS has not really released anything that was developed in-house that’s innovative. MS Office is a rip-off, DOS is a rip-off, Xbox is a rip-off, nothing they have done is original in any meaningful way.

    Look at Apple. The Mac is simply the most meaningful piece of hardware on the consumer market. Period.

    The Sony Walkman was original and meaningful, and while Apple has copied that paradigm with the iPod, they have done so in a way that is attractive and a serious money maker.

    MS doesn’t innovate, they simply buy what they need to get the job done rather than take the time to develop their own brands.

    What MS needs to do to see any hope for Windows to be any good is to do what Apple did with OS X: completely re-write the OS from scratch and forget supporting legacy crap. Even Apple has largely dumped the Classic uselessness in OS X. Notice that with each iteration, support for Classic goes away slowly.

    It’s too bad BeOS was ahead of their time. Their OS was, at the time, the first truely original OS. Like so many other great technologies like Betamax, people stuck with what they know, and what we know sucks.

    Case in point, Mac OS X is simply the finest consumer-based OS on the market. Not even Linux compares in the ease-of-use dept., supported apps, just works out the box goodness, etc.

    If Apple hardware was the same price as a PC, it would have a lot more market share than it does. They’ve already hooked millions with the iPod, so selling a MacBook for the same price as a Dell laptop would be a hit. After all, they are not selling simply hardware which costs the same price as what Dell sells, they are selling you an experience, a feeling, an attitude. And people are willing to pay.

  20. @15,

    MS has bought some companies/products that were/are innovative. What I mean is simply, MS has not really released anything that was developed in-house that’s innovative. MS Office is a rip-off, DOS is a rip-off, Xbox is a rip-off, nothing they have done is original in any meaningful way.

    Look at Apple. The Mac is simply the most meaningful piece of hardware on the consumer market. Period.

    The Sony Walkman was original and meaningful, and while Apple has copied that paradigm with the iPod, they have done so in a way that is attractive and a serious money maker.

    MS doesn’t innovate, they simply buy what they need to get the job done rather than take the time to develop their own brands.

    What MS needs to do to see any hope for Windows to be any good is to do what Apple did with OS X: completely re-write the OS from scratch and forget supporting legacy crap. Even Apple has largely dumped the Classic uselessness in OS X. Notice that with each iteration, support for Classic goes away slowly.

    It’s too bad BeOS was ahead of their time. Their OS was, at the time, the first truely original OS. Like so many other great technologies like Betamax, people stuck with what they know, and what we know sucks.

    Case in point, Mac OS X is simply the finest consumer-based OS on the market. Not even Linux compares in the ease-of-use dept., supported apps, just works out the box goodness, etc.

    If Apple hardware was the same price as a PC, it would have a lot more market share than it does. They’ve already hooked millions with the iPod, so selling a MacBook for the same price as a Dell laptop would be a hit. After all, they are not selling simply hardware which costs the same price as what Dell sells, they are selling you an experience, a feeling, an attitude. And people are willing to pay.

  21. Wreck: I don’t have time to debunk everything you just wrote in a few short paragraphs, but now I understand why you want to remain anonymous. You are particularly clueless about how things get popular and why they stay that way. Hint: it doesn’t matter if Macs were actually cheaper than many PCs. Most PC marketshare comes because of businesses who want the advantages of sticking with a single ecosystem brings them. I look at the PCs at the counter at Hertz rental car, for instance. Will Hertz switch to Macs, even if Macs were, say, $200 cheaper each? Hell no. Why not? Because the cost of the software they had written is a lot more than $200 each machine at this point and there would be very little, if any, value to doing such a switch.

    Betamax? It lost cause it couldn’t do two hour tapes in the beginning and later it lost cause none of the porn tapes at the local rental store were in Beta format.

    As for innovation? Who cares? The only innovations in business that really count are the ones that bring money in the front door. The rest are marketing expenses. And, if I were a businessman and someone offered me Microsoft or any other company I would take Microsoft almost every single time. Even when compared with Google and Apple.

  22. Wreck: I don’t have time to debunk everything you just wrote in a few short paragraphs, but now I understand why you want to remain anonymous. You are particularly clueless about how things get popular and why they stay that way. Hint: it doesn’t matter if Macs were actually cheaper than many PCs. Most PC marketshare comes because of businesses who want the advantages of sticking with a single ecosystem brings them. I look at the PCs at the counter at Hertz rental car, for instance. Will Hertz switch to Macs, even if Macs were, say, $200 cheaper each? Hell no. Why not? Because the cost of the software they had written is a lot more than $200 each machine at this point and there would be very little, if any, value to doing such a switch.

    Betamax? It lost cause it couldn’t do two hour tapes in the beginning and later it lost cause none of the porn tapes at the local rental store were in Beta format.

    As for innovation? Who cares? The only innovations in business that really count are the ones that bring money in the front door. The rest are marketing expenses. And, if I were a businessman and someone offered me Microsoft or any other company I would take Microsoft almost every single time. Even when compared with Google and Apple.

  23. Scoble,

    I’m not as clueless as you would believe.

    You’re thinking like MS now, and that’s the reason why the computer industry is somewhat stagnant in terms of OSes, for example.

    Yes, MS brought the cost down and enabled people to get into computing reasonably cheap in the early years.

    Macs are starting to come back more than you would believe. For example, in areas that matter, such as real scientific research, Macs are really starting to come into their own. Harvard has switched over to Macs, MIT uses zillions of them, the Palo Alto research facility, more schools are moving back to Macs than ever before (or even Linux).

    Macs have the distinction of being able to run Windows apps, Linux apps, etc, and if the programmers wrote standardized code, which they should have, it’s trivial to port stuff over. Take your example of $200. Take that $200 and times it by tens of thousands of computers. Remove the need for spyware and antivirus.

    It’s a proven fact that a Mac or Linux network takes far less trained sysadmins/network people to run them. Times those people by possibly thousands and you save even more by no needing them.

    Less crashes in OS X/Linux than in Windows. Far less.

    It’s sadly true that porn drives a lot of net-based innovation, and I think in time, a lot of people, despite the money, will come to regret that affiliation.

    Imagine telling your granddaughter or possibly new wife you made your fortune as a direct result of porn. Not a very moral story there.

    MS is slowly becoming less relevant — and they know it. Linux is gnawing away at the enterprise server space, Apple is king of consumer gadgets as well as school/education deployments, and is taking away from big Unix scientific deployments.

    MS is currently king of the desktop, but you will start to see that change in a few years. I’m seeing it already in certain circles. I won’t say who out of privacy concerns, but a certain very large company is about to drop its almost huge MS installed user base and switch to Linux and Macs. You’ll read about it soon enough, I’m sure.

  24. Scoble,

    I’m not as clueless as you would believe.

    You’re thinking like MS now, and that’s the reason why the computer industry is somewhat stagnant in terms of OSes, for example.

    Yes, MS brought the cost down and enabled people to get into computing reasonably cheap in the early years.

    Macs are starting to come back more than you would believe. For example, in areas that matter, such as real scientific research, Macs are really starting to come into their own. Harvard has switched over to Macs, MIT uses zillions of them, the Palo Alto research facility, more schools are moving back to Macs than ever before (or even Linux).

    Macs have the distinction of being able to run Windows apps, Linux apps, etc, and if the programmers wrote standardized code, which they should have, it’s trivial to port stuff over. Take your example of $200. Take that $200 and times it by tens of thousands of computers. Remove the need for spyware and antivirus.

    It’s a proven fact that a Mac or Linux network takes far less trained sysadmins/network people to run them. Times those people by possibly thousands and you save even more by no needing them.

    Less crashes in OS X/Linux than in Windows. Far less.

    It’s sadly true that porn drives a lot of net-based innovation, and I think in time, a lot of people, despite the money, will come to regret that affiliation.

    Imagine telling your granddaughter or possibly new wife you made your fortune as a direct result of porn. Not a very moral story there.

    MS is slowly becoming less relevant — and they know it. Linux is gnawing away at the enterprise server space, Apple is king of consumer gadgets as well as school/education deployments, and is taking away from big Unix scientific deployments.

    MS is currently king of the desktop, but you will start to see that change in a few years. I’m seeing it already in certain circles. I won’t say who out of privacy concerns, but a certain very large company is about to drop its almost huge MS installed user base and switch to Linux and Macs. You’ll read about it soon enough, I’m sure.

  25. No doubt it’s hard to say whether the rock ‘n roll approach or conservative approach is the way to go. But, I know that MSFT is sitting there with 3.1 billion dollars more in cash and securities than Google is today. Google has made its gambit. It will be interesting to see how Microsoft responds… if it does.

  26. No doubt it’s hard to say whether the rock ‘n roll approach or conservative approach is the way to go. But, I know that MSFT is sitting there with 3.1 billion dollars more in cash and securities than Google is today. Google has made its gambit. It will be interesting to see how Microsoft responds… if it does.

  27. Hint: it doesn’t matter if Macs were actually cheaper than many PCs. Most PC marketshare comes because of businesses who want the advantages of sticking with a single ecosystem brings them

    First of all, this Macbook cost me a grand. Macs aren’t expensive. Get out of 1993. Next, it’s the opposite of what you said, PC marketshare is about having various suppliers, not ONE ecosystem. If anything, what makes OS X great is that Apple can control the whole widget, but that same aspect makes it BAD for businesses, becuase they have no recourse if Apple jacks up the price on hardware.

    Since the closed-architecture model works so well, Apple should just focus on the home market and forget about the overall marketshare. Macs are of people. PC’s are for…banks.

  28. Hint: it doesn’t matter if Macs were actually cheaper than many PCs. Most PC marketshare comes because of businesses who want the advantages of sticking with a single ecosystem brings them

    First of all, this Macbook cost me a grand. Macs aren’t expensive. Get out of 1993. Next, it’s the opposite of what you said, PC marketshare is about having various suppliers, not ONE ecosystem. If anything, what makes OS X great is that Apple can control the whole widget, but that same aspect makes it BAD for businesses, becuase they have no recourse if Apple jacks up the price on hardware.

    Since the closed-architecture model works so well, Apple should just focus on the home market and forget about the overall marketshare. Macs are of people. PC’s are for…banks.

  29. Mike,

    What model did you buy, and if you bought a MacBook, did you get the white one?

    Then, tell me, pray, what in the world are scientists in the thousands doing buying them? Research centers are buying into Apple in droves, schools. too.

    So 1993? Macs are far more pricier for similar specs than PCs. Been reading Doctorow or Pilgrim anytime in the last year? Mac Mini aside, I recently bought a Toshiba Satellite for just under $800 that a similar MacBook spec would have been at least $1600. MacBook Pros are ridiculously priced, when a Lenovo or Toshiba offers more for almost a thousand less. I’m an Apple fan, but let’s face it, they charge more because of the “experience” not because the hardware is any better. It’s largely the same stuff, just in a non-elegant commodity PC laptop package.

    I can get a complete PC desktop system for less than a Mac Mini. Is it great? Not necessarily, but for the average home user, which you claim Apple should be aiming for, it’s great.

  30. Mike,

    What model did you buy, and if you bought a MacBook, did you get the white one?

    Then, tell me, pray, what in the world are scientists in the thousands doing buying them? Research centers are buying into Apple in droves, schools. too.

    So 1993? Macs are far more pricier for similar specs than PCs. Been reading Doctorow or Pilgrim anytime in the last year? Mac Mini aside, I recently bought a Toshiba Satellite for just under $800 that a similar MacBook spec would have been at least $1600. MacBook Pros are ridiculously priced, when a Lenovo or Toshiba offers more for almost a thousand less. I’m an Apple fan, but let’s face it, they charge more because of the “experience” not because the hardware is any better. It’s largely the same stuff, just in a non-elegant commodity PC laptop package.

    I can get a complete PC desktop system for less than a Mac Mini. Is it great? Not necessarily, but for the average home user, which you claim Apple should be aiming for, it’s great.

  31. @18 “MS is currently king of the desktop, but you will start to see that change in a few years. I’m seeing it already in certain circles. I won’t say who out of privacy concerns, but a certain very large company is about to drop its almost huge MS installed user base and switch to Linux and Macs. You’ll read about it soon enough, I’m sure.”

    How long have people been saying this? 25 years now at least? Sure there will the odd company that says they are switching. But in the long run Scoble is right in his response to you. The benefits of switching have to FAR outweigh the costs. Until that happens, you won’t see the sea change you predict. Call me when even 30% of the F100 have “switched”. Then you might be on to something. Until then…..

  32. @18 “MS is currently king of the desktop, but you will start to see that change in a few years. I’m seeing it already in certain circles. I won’t say who out of privacy concerns, but a certain very large company is about to drop its almost huge MS installed user base and switch to Linux and Macs. You’ll read about it soon enough, I’m sure.”

    How long have people been saying this? 25 years now at least? Sure there will the odd company that says they are switching. But in the long run Scoble is right in his response to you. The benefits of switching have to FAR outweigh the costs. Until that happens, you won’t see the sea change you predict. Call me when even 30% of the F100 have “switched”. Then you might be on to something. Until then…..

  33. @22,

    Then I guess people enjoy dealing with the virii/worm outbreaks, the horrible sysadmin requirements, the constant RMAs, etc.

    Every big Mac deployment I know of has FAR fewer problems than similar-sized PC ones.

    Mac may be more proprietary because of the hardware lock-in, but I’d rather take my chances with that problem.

    No matter what anyone says, MS will be slowly losing marketshare to Linux/Macs.

    T’Pol will be my personal assistant long before MS can turn the tide of losing customers.

  34. Google AdSense is ready to to globally leverage and improve DoubleClick. Microsoft AdCentral is not. You don’t spend billions to buy something you don’t really know how to use.

  35. Google AdSense is ready to to globally leverage and improve DoubleClick. Microsoft AdCentral is not. You don’t spend billions to buy something you don’t really know how to use.

  36. @22,

    Then I guess people enjoy dealing with the virii/worm outbreaks, the horrible sysadmin requirements, the constant RMAs, etc.

    Every big Mac deployment I know of has FAR fewer problems than similar-sized PC ones.

    Mac may be more proprietary because of the hardware lock-in, but I’d rather take my chances with that problem.

    No matter what anyone says, MS will be slowly losing marketshare to Linux/Macs.

    T’Pol will be my personal assistant long before MS can turn the tide of losing customers.

  37. .If the Xbox Marketplace and Zune Marketplace can gain some marketshare – it would be a blow for Google as they do not have access to those zones.
    Wouldn’t it be prudent to invest those billions there?

    Same goes for the iPhone, etc.

    Um, Google has *plenty* of access to the iPhone.

    It’s a proven fact that a Mac or Linux network takes far less trained sysadmins/network people to run them. Times those people by possibly thousands and you save even more by no needing them.

    Nonsense. It takes a lot more WORK to get a Windows network down to a small number of administrators, but the idea that you can’t do it is silly. YOu can indeed do it.

    Hint: it doesn’t matter if Macs were actually cheaper than many PCs. Most PC marketshare comes because of businesses who want the advantages of sticking with a single ecosystem brings them

    Robert, your ignorance of modern IT thinking is showing. That kind of thinking is dying, and about time. Businesses are realizing there is real value to heterogeneous networks above what *any* homogeneous network can provide. There is also a level of safety from platform-specific malware you get for free in a heterogeneous network that you cannot replicate in a single-strain network.

  38. .If the Xbox Marketplace and Zune Marketplace can gain some marketshare – it would be a blow for Google as they do not have access to those zones.
    Wouldn’t it be prudent to invest those billions there?

    Same goes for the iPhone, etc.

    Um, Google has *plenty* of access to the iPhone.

    It’s a proven fact that a Mac or Linux network takes far less trained sysadmins/network people to run them. Times those people by possibly thousands and you save even more by no needing them.

    Nonsense. It takes a lot more WORK to get a Windows network down to a small number of administrators, but the idea that you can’t do it is silly. YOu can indeed do it.

    Hint: it doesn’t matter if Macs were actually cheaper than many PCs. Most PC marketshare comes because of businesses who want the advantages of sticking with a single ecosystem brings them

    Robert, your ignorance of modern IT thinking is showing. That kind of thinking is dying, and about time. Businesses are realizing there is real value to heterogeneous networks above what *any* homogeneous network can provide. There is also a level of safety from platform-specific malware you get for free in a heterogeneous network that you cannot replicate in a single-strain network.

  39. I definitely think MS is sneaky enough to bid up doubleclick and others, but they also are scrambling to get a decent acquisition.

    They are the “george bush” of software companies: if the flaws with their software are not enough, then you can tell they are stupid by their acquisition strategy so far.

    go linux, beat windows

  40. I definitely think MS is sneaky enough to bid up doubleclick and others, but they also are scrambling to get a decent acquisition.

    They are the “george bush” of software companies: if the flaws with their software are not enough, then you can tell they are stupid by their acquisition strategy so far.

    go linux, beat windows

  41. I am surprised that you feel comfortable divulging correspondence between yourself and Steven Sinofsky. It seems strange that you aren’t compelled to keep such correspondence private. Have you been released from any and all confidentiality agreements? Did you sign any such agreements?

    Curious …

  42. I am surprised that you feel comfortable divulging correspondence between yourself and Steven Sinofsky. It seems strange that you aren’t compelled to keep such correspondence private. Have you been released from any and all confidentiality agreements? Did you sign any such agreements?

    Curious …

  43. @22 “No matter what anyone says, MS will be slowly losing marketshare to Linux/Macs.”

    More likely Linux, but not Macs..at least in the F500 enterprise space. And a fair amount of those companies already have Linux/Unix servers in their environment. Key word in your statement is “slowly”. Sort of the same argument as global warming.

  44. @22 “No matter what anyone says, MS will be slowly losing marketshare to Linux/Macs.”

    More likely Linux, but not Macs..at least in the F500 enterprise space. And a fair amount of those companies already have Linux/Unix servers in their environment. Key word in your statement is “slowly”. Sort of the same argument as global warming.

  45. Ah, the PC wars. So tiresome.

    It doesn’t matter. An individual should use what they like and that is all that matters.

    With that said, my daughters, my wife and I have Mac laptops and no viruses.

    My stepson has a PC that gets riddled with Spyware and viruses and he has to wipe his drive every six months. He’s switching to a Mac when he enters college.

    That’s it from the trenches!

  46. Ah, the PC wars. So tiresome.

    It doesn’t matter. An individual should use what they like and that is all that matters.

    With that said, my daughters, my wife and I have Mac laptops and no viruses.

    My stepson has a PC that gets riddled with Spyware and viruses and he has to wipe his drive every six months. He’s switching to a Mac when he enters college.

    That’s it from the trenches!

  47. And in other equally important news, Prince William confirms to a stricken Kate Middleton that their romance, is like, totally, like, so, like, over, like, total.

    Google and Microsoft comparisons and Mac/Linux/PC wars are so overwrought…pointless geek soap operas.

  48. And in other equally important news, Prince William confirms to a stricken Kate Middleton that their romance, is like, totally, like, so, like, over, like, total.

    Google and Microsoft comparisons and Mac/Linux/PC wars are so overwrought…pointless geek soap operas.

  49. So my question (somewhat tongue-in-cheek, perhaps) is which company should I approach about buying out my company, Google or Microsoft? We’re in the audio/video arena, at the very unique place where content and community intersect. Our technology makes perfect sense for socializing Windows Media Player, but it has amazing search implications as well.

    Would someone take a look at one of our current implementations, and please tell me who should buy us? It’s keeping me up at night!

    Carter Harkins
    http://crowdabout.us

  50. So my question (somewhat tongue-in-cheek, perhaps) is which company should I approach about buying out my company, Google or Microsoft? We’re in the audio/video arena, at the very unique place where content and community intersect. Our technology makes perfect sense for socializing Windows Media Player, but it has amazing search implications as well.

    Would someone take a look at one of our current implementations, and please tell me who should buy us? It’s keeping me up at night!

    Carter Harkins
    http://crowdabout.us

  51. James: you might have a point there. But any of Microsoft’s executives’ email is pretty much an open book anyway due to various lawsuits and I didn’t reprint the email or give any details that would harm Microsoft’s position. But, gotta read over my NDAs some more.

  52. James: you might have a point there. But any of Microsoft’s executives’ email is pretty much an open book anyway due to various lawsuits and I didn’t reprint the email or give any details that would harm Microsoft’s position. But, gotta read over my NDAs some more.

  53. Carter: that’s a really tough question. I’d meet with both. Then if you get offers from both (very rare) you’ll have to decide what’s more important? People you like working with, technology you want to play with, or just the dollar amount? I’ve heard, for instance, that Flickr turned down a larger offer from AOL because they preferred the team at Yahoo.

  54. Carter: that’s a really tough question. I’d meet with both. Then if you get offers from both (very rare) you’ll have to decide what’s more important? People you like working with, technology you want to play with, or just the dollar amount? I’ve heard, for instance, that Flickr turned down a larger offer from AOL because they preferred the team at Yahoo.

  55. The problem is that most execs in larger software companies are under tremendous pressure to continuously grow their business buy 20-50%, quarter over quarter. When you reach 500M-1B revenue, the new incremental business you need to generate gets very significant, significant enough that buying and growing small companies does not make “business sense”.

    Specially given that there are important integration costs (both technical and sales related costs).

    This is probably why YouTube and DoubleClick are easier deals for Google than Microsoft and one can only hope that Ray Ozzie is working on a miracle plan because by not trying anything, Microsoft seems paralyzed.

    -Edwin

  56. The problem is that most execs in larger software companies are under tremendous pressure to continuously grow their business buy 20-50%, quarter over quarter. When you reach 500M-1B revenue, the new incremental business you need to generate gets very significant, significant enough that buying and growing small companies does not make “business sense”.

    Specially given that there are important integration costs (both technical and sales related costs).

    This is probably why YouTube and DoubleClick are easier deals for Google than Microsoft and one can only hope that Ray Ozzie is working on a miracle plan because by not trying anything, Microsoft seems paralyzed.

    -Edwin

  57. Robert,

    I want to question the “moat” around Microsoft Office. MSFT should be very worried about the web based office products. Products like Jotspot (now Google), editgrid and Zoho have some work left to catch up on features but they are getting close.

    It may seem funny but information woker products (spreadsheets, documents, presentations should be “web native”. Products like RSSbus, Yahoo Pipes and Plagger make sharing and collaborating very easy. It is easier and far cheaper to use an online spreadsheet for reporting on the web than it is to use Excel.

    This is the Office of the future and MSFT isn’t playing. They should be very worried but I don’t think they are. BIG companies never worry.

    -Ken Gardner

  58. Robert,

    I want to question the “moat” around Microsoft Office. MSFT should be very worried about the web based office products. Products like Jotspot (now Google), editgrid and Zoho have some work left to catch up on features but they are getting close.

    It may seem funny but information woker products (spreadsheets, documents, presentations should be “web native”. Products like RSSbus, Yahoo Pipes and Plagger make sharing and collaborating very easy. It is easier and far cheaper to use an online spreadsheet for reporting on the web than it is to use Excel.

    This is the Office of the future and MSFT isn’t playing. They should be very worried but I don’t think they are. BIG companies never worry.

    -Ken Gardner

  59. Ken: I agree with you but so far Web offerings are pretty meek when compared with Office 2007. Also getting people to switch to a new brand and a new approach is going to be more difficult than expected. I still see a lot of people using Windows 2000 and Office 2000.

  60. Ken: I agree with you but so far Web offerings are pretty meek when compared with Office 2007. Also getting people to switch to a new brand and a new approach is going to be more difficult than expected. I still see a lot of people using Windows 2000 and Office 2000.

  61. The fact that Robert’s question about *business strategy* in the online space devolves into a hoary OS war is more than a little indicative of the main challenge Google faces: they are a tech company still run for the most part by propeller heads with grand ambitions trying to evolve into a diversified business with more than a single revenue stream. Can the suits win the internal war?

    Their business strategy has been scattershot to this point (YouTube being the most expensive example). DoubleClick makes much more sense, though the pricetag suggests panic to me — keep out of MS hands at all costs and make a deal now because once the Dems take over in 2008 the regulatory environment might not be as friendly to such consolidation in the ad business.

  62. The fact that Robert’s question about *business strategy* in the online space devolves into a hoary OS war is more than a little indicative of the main challenge Google faces: they are a tech company still run for the most part by propeller heads with grand ambitions trying to evolve into a diversified business with more than a single revenue stream. Can the suits win the internal war?

    Their business strategy has been scattershot to this point (YouTube being the most expensive example). DoubleClick makes much more sense, though the pricetag suggests panic to me — keep out of MS hands at all costs and make a deal now because once the Dems take over in 2008 the regulatory environment might not be as friendly to such consolidation in the ad business.

  63. I thought it was pathetic when Microsoft goes into reactive mode wrt Google (spending 2 billion to try to compete in ad/search/etc). I still do.

    But lately, it seems that Google is constantly in reactive mode wrt Microsoft. Microsoft floats the idea that they’re interested in DoubleClick, and Google panics, and breaks the bank, not because they give a damn about DoubltClick, but just to keep it out of Microsoft’s hands. Same thing happened regarding other Google acquistions. Pretty pathetic.

    Google doesn’t innovate much “in house” either. Seems all they do is buy, buy, buy.

  64. I thought it was pathetic when Microsoft goes into reactive mode wrt Google (spending 2 billion to try to compete in ad/search/etc). I still do.

    But lately, it seems that Google is constantly in reactive mode wrt Microsoft. Microsoft floats the idea that they’re interested in DoubleClick, and Google panics, and breaks the bank, not because they give a damn about DoubltClick, but just to keep it out of Microsoft’s hands. Same thing happened regarding other Google acquistions. Pretty pathetic.

    Google doesn’t innovate much “in house” either. Seems all they do is buy, buy, buy.

  65. @44,

    It was a knee-jerk reaction IMO, but Google is far less evil than MS. MS loves to embrace and extend its technologies for lock-in. Since they have 95% of the desktops already, they’ve achived it, but they’ve started to bleed loyalty with customers. Vista sucks. Full stop.

    Google is beatable. I just don’t have to use them or their services. I block ads anyway, so I don’t have to see their tripe or anyone elses while online. Personal battle won.

    Very few players really innovate anymore. Opera ASA is an innovater. Apple is an innovator. BSD innovates with networking, the open source crowd innovates quite a bit with kernelspace coding.

    Most stuff is just a rehash of something else with a few twists and new gizmos.

    I’m patiently waiting for the new players in the search arena; someone who’s search stuff is better than Google’s. It’s only a matter of time.

  66. @44,

    It was a knee-jerk reaction IMO, but Google is far less evil than MS. MS loves to embrace and extend its technologies for lock-in. Since they have 95% of the desktops already, they’ve achived it, but they’ve started to bleed loyalty with customers. Vista sucks. Full stop.

    Google is beatable. I just don’t have to use them or their services. I block ads anyway, so I don’t have to see their tripe or anyone elses while online. Personal battle won.

    Very few players really innovate anymore. Opera ASA is an innovater. Apple is an innovator. BSD innovates with networking, the open source crowd innovates quite a bit with kernelspace coding.

    Most stuff is just a rehash of something else with a few twists and new gizmos.

    I’m patiently waiting for the new players in the search arena; someone who’s search stuff is better than Google’s. It’s only a matter of time.