Alternative title:  Who Do You Trust?, Part II

Last month, we looked at the question: Who Do You Trust?. That discussion considered how the issue of trust impacts various corporate tech firms.

In light of yesterday’s *Micro-Hoo!™ announcement, I thought it might be interesting to revisit the issue. In our Trust discussion, we looked at a few firms — Apple, Microsoft, AOL, Google, Dell, and Yahoo. At the time, I observed:

"Consider: Apple (AAPL) can get away with a snafu like the iPhone
pricing issue, because it has earned the trust, even the adoration, of
its users. Could you imagine having that trust with Microsoft (MSFT)?

Dell used to have that trust, but frittered it away, as they moved
from one of the best to much worse customer service in the PC space.
AOL also — they’ve decayed, become a garbage service for the clueless.
(AIM remains mostly worthwhile).

Google (GOOG) has earned my confidence, and — so far — has not given me any reason to reconsider that trust.

Yahoo (YHOO) still has some residual trust — but its waning fast. I
still use Yahoo as a home page, but their inattentiveness to some of
their properties is shameful. They have a very, very brief period to
right the ship, or their long horrific slide into irrelevancy will be irreversible. Yahoo has frittered away so many good properties, I find it embarrassing. (WhoTF is advising them?)"

Now, Trust sounds like "a warm fuzzy" — a non-quantifiable thing that no one in business school will spend much time on. But when it comes to your personal data and the internet, Trust is a key component. Further, Trust may be the one variable that may determine how successful this merger is in the years to come. (See Paul’s look at online market share).

Amongst all the cheerleading on the announcement (CNBC was something to behold Friday morning), I have yet to see this issue discussed. Hopefully, we can remedy that here.

Our question of the moment: Why has Microsoft never really caught fire online the way they did on the desktop? I don’t want to get into another run-of-the-mill Microsoft bashing; rather, this is a genuine attempt to understand and explain their failure in the online arena.

The obvious answer was they had(have) a desktop monopoly, and no one controls 95% of anything online. But given their massive cash hoard, their deep programming ability, and a couple smart guys at the top of the company, why have all of the Microsoft online properties been duds? The list is rather surprising:

Hotmail
MSN
Internet Explorer
.Net
Live Spaces
Local Live (Maps)
Messenger
Live Search

Is there a single online property created by Redmond that lit it up? Not one dominates their space. Everyone of these offerings is second or 3rd tier also-ran that imitates another innovator. Hotmail is the closest thing to a success (and most people use that as their garbage account).

I have a theory as to this phenomena, and Steve "my-kids-cant-have-an-iPod" Ballmer ain’t gonna like it.

The Microsoft user experience has never been particularly pleasant. I don’t mean relative to Macs or Google or what have you, I mean objectively, its always been a mediocre, buggy, difficult, crash-prone, virus-laden, oh-well-call-it annoying experience. Counter-intuitive doesn’t begin to cover it.

This god-awful user experience is no secret; I’m not breaking any news here. In fact, it is so well known that you probably have overlooked it as an issue. But websurfers obviously haven’t. Over the years, anyone with with a PC has had ingrained onto their psyches EXACTLY what the Microsoft user experience was.

Once Apple’s products became price competitive, they exploded in sales;  Why was that? (iPod Halo? Puh-leeze!). Outside of Windows/Office, MSFT’s biggest success is the X-Box. From
the gamers perspective, there is absolutely no PC/Windows involvement
whatsoever.

This is no coincidence.

Ask yourself this question: When you first heard that Ford was using
Microsoft’s Sync for their car audio/navigation/communication, what was
your reaction? Gotta get me a Mustang! or Man, are they toast. Which was it?

Even if Windows were to suddenly become pleasant, it would take a very long time to overcome that prior set of experiences. Although I am not a fan of General Motors products, speaking objectively, I can say their cars have become much improved — more reliable, better designed, improved build quality. They are just about on par with Nissan and Subaru, and pretty close to Honda and Toyota. Yet its going to take GM many years to overcome the perception of their brand as being nowhere near Honda or Toyota.

Microsoft has a similar branding issue, and I think its part of the reason why their online offerings have fared so poorly. In the corporate computing environment, you had no choice — you worked on the machine the IT department gave you. 

But online?  "CLICK!"  Buh-bye!

Stop for a moment to consider how brilliant Google’s motto — Don’t Be Evil — turned out to be. Its not just that our competitor’s products are inferior, they are on the wrong side in the eternal struggle between good and evil. Now that’s some good product positioning!

~~~

Back to our issue of Trust: I know of no one that unreservedly trusts Microsoft. Plenty of people still trust Yahoo!. Google, like Apple, is widely trusted.

I wonder how many current Yahoo! users will find alternatives to Micro-Hoo!™ once this merger closes. The deal risk here is a mouse. its not the usual integration/cost savings accounting stuff, or the clash of corporate culture bullshit we’ll be hearing so much about over the next few weeks.

No, the real risk here is "CLICK!".

We’ve seen the expensive opening gambit from Microsoft. It will be quite interesting to see how Google responds to it. Google apps is a not so subtle stab at one of Microsoft’s cash cows. Look for a similar attempt to wrest more revenue, and even more portal traffic away from Yahoo!.

"CLICK!".

~~~

>


* Micro-Hoo!™ is a registered trademark of Infectious Greed.

Category: Corporate Management, M&A, Web/Tech

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

78 Responses to “Micro-Hoo!™: Desktop vs Internet”

  1. Mike B says:

    I think you nailed it. Microsoft has really hurt themselves online because they always tried to use it as yet another club towards vendor lockin. There is a HUGE fight going on between the social networks and Microsoft as various social network sites try to link in your contacts from IM. Google and Yahoo and co let them be imported and used. Microsoft wants to be paid for every contact imported from MSN – like they own it (interesting question in itself) But if the social network agrees to make MSN Msgr the top billed chat client and exclude or diminish the others, the per contact fee is waived 100%.

    That kind of stuff goes on all the time. Not saying all the other companies are perfect – but it continues to shine a spotlight on ‘Do No Evil’ I tend to think of myself as not a naive person and fairly skeptical. Any new MS product would be researched before I installed it for worries over stupid or evil policies that might be involved. Google? They have earned a significant amount of trust – I’d install Google Desktop without concern, knowing a small amount of privacy might be given up. But a MS equivalent – oh hell no. Yahoo was always in between and I think because they didn’t have as large a reserve of trust among users, they will suffer from this. MS will be left with those who don’t know enough or care enough which isn’t the customers people are trying to advertise to. The MS fanboys are already in Redmond’s hands.

    This merger only helps Google long term.

    You nailed it with this idea of users and trust. Its a powerful thing, even among IT types like myself.

  2. Aaron says:

    Dont Be Evil? Google got over that. Especially if you run an tyrannical regime with lots of money to pay (talking about China here).

    Isn’t the real test of ‘Don’t Be Evil,’ that you can stand firm when it is expedient to go with the flow? Well GOOG failed that test when it helps China track down internet users for thought and ideological crimes.

  3. blam says:

    My current misperception is:

    Microsoft internet has always seemed too invasive and dictatorial. MS slept, and tried to dominate the AOL model while Google re-invented and standardized the category.

    I also think that there is an, as yet unacknowledged, unease about anonymity and security. In their hubris, MS has always been in your face about collecting personal information. Google has been less transparent and most people don’t realize the quantity of info that google is collecting and storing, yet.

    Like GM, MS has been defending the sunk cost of the profit infrastructure. Extending the franchise always seems better than canniballizing your business model.

    Google can be thrown out in a heartbeat. All that is required is to change your home page. I think Google is going down the same path but with an inherently weaker franchise and will be thrown out over security issues.

    It is still more difficult to do without MS. Neither will win the whole enchilada.

  4. Steve Barry says:

    I have a background in electrical engineering and have used Microsoft products since 1990. I never considered them innovative. MS-DOS was bought from another company. The GUI desktop interface was developed at Xerox and perfected at Apple. Word is a takeoff on Wordstar…excel copied Lotus 1-2-3 and Visicalc. Money copied Quicken…IE is based on Mosaic and Netscape…Zune came after iPod, Xbox copied everyother videoogame. Microsoft may add some nice features to the core products they imitate, but the main things they invented were the blue screen of death and security holes. Their main strength is marketing and leveraging their monpoly.

    Then of course, we all have had horrible experiences at one time or another. Like the time Microsoft prompted me to do an update and a few clicks later my system was so screwed up I literally had to buy a new PC. Or the time I realized my Internet cache was about 10 times the size I specified and could only be deleted by a special utility I found on the web. Or how Money 2006, the 8th upgrade I have paid for can’t even track the mortgage payment number correctly, a bug that has existed for several versions no matter how many times I complain. Microsoft is so big, how can they repond to customer issues? If you buy a PC from dell, you can’t call Microsoft for support…you have to go through Dell. My main worry now is eventually be forced to go to Vista, which I read terrible things about. I do use Yahoo as my potal and homepage and this mega merger does not thrill me or the market. The combined Microhoo lost 7 Billion in market cap yesterday in an up market.

  5. Steve says:

    Sorry Barry, but .Net is not a dud. Now the branding or marketing is kinda of confusing but as software development platform it’s very popular. Just search monster for .net or the equivalent, c#, vb.net etc… and count the number of available jobs. In fact, .net was a “bet the company” move according to Gates and the guys that pulled it off are top notch. Hence Borland, Sun, Lotus (IBM) and even Oracle are feeling the pressure from MS excellent execution of .net

    For an off topic, why don’t the geniuses at GE leverage Brian Williams and have him do an additional hour at msnbc from 7-8 eastern. Or why hasn’t CNBC included more CNBC World into their coverage, maybe a little less Cramer. Don’t they know that the market is the star not their producers spin. Barry don’t they tell you to be confrontational on Kudlow. Be direct, be an ideologist tool. (not you of course)

    Thanks for the great site

  6. Steve says:

    When the early versions of DOS and Windows were released, every PC maker who wanted it had to agree to pay Mister Softee a licensing fee on every PC they ever sold — regardless of whether it had Windows on it or not.

    Made it economically impossible to use another OS. That’s MSFT genius.

  7. Bill says:

    Unlike Apple, MSFT created a class of IT people. Microsoft infiltrated the entire corporate universe at the behest of experts. XP was called the IT Department Full Employment Act for a reason.

  8. John Borchers says:

    Steve,

    Agreed they are a follower and not a leader. Vista is actually the most stabile windows platform so far. The problems comes in reverse comptability for drivers and especially database softwares. Vista is very good if you have kids because it can lock down the OS like Fort Knox.

    I have had Money too and stopping using it. It is the most buggy finance software I have ever seen.

    Aside note: Friday I sold all my longs. My 401K is set again to leave the market Mon morning. I bought EEV and double inverse TWM.

    The earnings that have been coming in are worse than I expected and I don’t imagine they are going to be getting better anytime soon. People are steering again to the latter half of the year with the Fed cuts but I don’t think it’s going to do anything.

    Also I had gains with DRI, GRMN which were over 10% in less than 2 weeks. RIMM went no where for me.

    I also notice relatively low insider buying at pretty low price multiples and GS insiders looks to have unloaded some stock which is odd.

    I don’t have GOOG short but I wouldn’t touch that. Advertising revenue is just going to get lower in the internet. The click through rate is terrible. How many times do you really care what ads you see on the net? You can already see this with the demise of YHOO, MSFT.

    The main problem in the world right now I see with businesses is competition is greater than demand.

    Anyone notice the German stock market over the last few years? This one seems to have bubbled almost more than China.

  9. knobboy says:

    What’s scaring the bejeesus out of MS is Google Documents. It didn’t hit me until I went there earlier this week and uploaded an Excel spreadsheet.

    Tell ya, I’ve done a ton and a half of Web programming (front and back ends and everything in between), and what Google’s done with the online functionality here is nothing short of amazing.

    And it’s available anywhere on the internets.

    And it’s free.

  10. Ross says:

    I am completely incompetent with technology in general so I have nothing to add as to whether this merger makes sense. Yet if I were a MS shareholder, which I am not, I would be very upset with what I regard as squandering the cash hoard.

    I grew up doing calc with a slip stick but I can read a balance sheet and income statement with the best of them. The merger makes no sense financially. I leave it to you techy folks if it makes sense business wise.

    Who do you trust? NEVER GM. I was dumb enough to buy a 1978 Olds Delta 88 diesel. Took the hit and sold it within 6 months.

  11. Winston Munn says:

    R&D at Microsoft stands for Repackaging & Distribution.

  12. Steve:
    Brian Williams? Are you kidding me? Does anyone watch the news for him? Or do half of them forget that Brokaw isn’t on anymore? The hottest property GE has is Olbermann.

  13. Thomas Pindelski says:

    It’s good to see Gates trying to give something back to society when you think how many lives have been shortened owing to the stress caused by all those lockups from his truly wretched software and OS.

    But don’t for one minute think Apple is incapable of similar errors. Whereas every Apple device we bought through 2006 has been super reliable (it’s now 5 years since we touched a PC in our household and yes, our life expectancies have increased as a result) every 2007 purchase (iPhone, router, MacBook and iMac) has failed and needed repairs. Further, Apple, through it’s ‘our way or no way’ design approach has done an excellent job of being the most arrogant manufacturer of consumer durables on the planet. Not a prescription for success.

    And did anyone of those great sell side analysts ever learn the words ‘succession planning’ at MBA school when it comes to Apple? You can’t accuse MSFT of blowing that one, even if the current CEO seems to be a complete boob. At least they have management depth.

  14. Ragnar says:

    Choosing to go elsewhere on the web is much easier than on the desktop. People’s hardware and software investment can simply follow them to greener pastures when all you have to do is type in a new address.

    I disagree with you regarding the car companies. Subaru has managed to reposition themselves much higher than Nissan and GM in terms of quality and brand perception. Most new Subarus are bought by upper middle class people who would also be looking at the nicer Toyotas, Hondas and even Acuras. Toyota has had quality problems and design issues a la Microsoft’s, and is becoming the car company that builds grandma’s next Avalon or Camry. Toyota’s brand is beginning to erode.

  15. Marcus Aurelius says:

    Microsoft leveraged years of IBM branding (remember when the “IBM PC” , became the “PC” and “PC” became synonymous with computers that ran MS-DOS?). Talk about stealing someone else’s thunder.

    They also grabbed dominant market share by giving away their OS to hardware manufacturers, with the understanding that their application sales would more than offset their losses on OS give-aways – no matter how buggy the application and/or the software.

    The most apt analogy would be gas stations giving away free Ford Pintos that could only be filled with gas by using a special nozzle – available only from the gasoline provider who gave you the Pinto, and priced significantly higher than the fuel at non-participating gas stations.

    There you sit in your cheap-assed rust bucket Pinto, while your neighbor (the idiot who knows nothing about cars) whizzes by in his more expensive Toyota Corolla (cheap Japanese POS!).

    I’m heading for the Apple Store this afternoon. I’ll bet I have to wait in line.

  16. grace says:

    Hotmail? Internet Explorer. Messenger? Live Space? What duds. Holy RDF batman.

  17. Rosevillebill says:

    Look at what they did with Internet Exploder by bringing on Active X. They always have to do things their way instead of following standards that everyone else has adopted. They weren’t concerned about our security at all and wanted to corner the market when they implemented Active X. Thank you Mozilla for Firefox.

  18. ronin says:

    Toyota’s brand is beginning to erode.
    Which is why it’s the no.1 car company in the US? Maybe it doesn’t have the cool factor, but it’s doing a lot better than GM or Ford.

    Re: MSFT’s cash hoard- Anyone notice the antipathy corporate America has in paying out dividends to their shareholders? Share buybacks are not “returning capital to shareholders”-you can only “use” it to buy more shares. They don’t let shareholders decide. Buying back overpriced shares may make CEO stock options go up, but not real earnings. Ill thought out mergers create corporate empires, not necessarily shareholder value.

  19. Entrepreneur says:

    Barry – excellent post today. I think the issue of trust is a “tip-of-the-iceberg” kind of deal for much of industry and all of tech, and will become continually more important moving forward.

    As for MSFT, I’ve worked with them closely for over a decade, and would offer the following critiques that help explain why they miss so often, even given their other huge advantages:

    1) Culture – “techiness is next to godliness.” That gives them many smart people with high technical competence, but very little intuitive understanding of the customer. They do a lot of customer and market research because they have to… their feel for innovation, out-of-the-box thinking and developing trends is somewhere between poor and nonexistent. This won’t change until leadership emerges that emphasizes customers and pure product innovation.

    2) Product development method – they look at markets and backtrack to try and define products that can exploit installed bases. They rarely (maybe never?) take a bottoms-up approach from the users perspective to develop the next great thing. Given that Jobs is in the loop nowadays and is constantly highlighting this weakness by building newness all over the place, you would think they could adapt. Not sure why they can’t. Perhaps it’s ego?

    3) Risk assessment – it’s a chicken company. Too many “fraidy-cats.” They have all the advantages that should lead to industry-leading innovation. Money. A ton of smart people. Technical expertise. An OS-monopoly amongst the general public. But somehow they can’t manage to really take a good risk, especially when developing products and services. I agree with the previous posters who ding their innovation. Their culture doesn’t promote it, and their management overlaid a risk-assessment system that kills really creative thinking at multiple levels of the management structure.

    Even though they have every excuse to be complacent, I don’t see that as their problem. Many inside MSFT know they stink at innovation. They can see that all the great new stuff is developed elsewhere. They are aware and concerned with Google and other innovators. It’s just that they cannot seem to re-work the culture into one that is customer-centric, risky and hip.

    It would be interesting to get feedback from former MSFT insiders that left the company to pursue other, freer companies. I bet you’d find an underlying theme from these people… seeking risk and innovation at he expense of money and security.

  20. s0mebody says:

    I agree with Ross about squandering the cash hoard. The market looked like it was about to puke up tons of YHOO stock. MSFT is dumb for not figuring out a way to buy YHOO for less than $40 billion.

  21. Bob A says:

    If it says “MSN” on my Yahoo home page it will not longer be my homepage. There are plenty of other finance sites and if Yahoo Finance ends up with the stupid butterfly on it there I go. I’ll keep using Windows for OS. I’ll use Google for Search. But I won’t use one company for everything. Gotta keep the Yin/Yang in check.

  22. Advsy says:

    Sorry to go slightly off topic but Cnbc really was something to behold on Friday.

    The real implication of that for me is that I can’t tell if they are reading market sentiment better than I am of if their influence is bigger than I have imagined is possible.

    For months and months at least half of their silly pundits have been very emphatic about with job growth steady a recession is not possible. Then a horrific jobs report comes out and they manage to duck the entire subject! (The horrific part is the downward revisions for all of last year)

  23. druce says:

    Yahoo is the new Lotus. Microsoft is the new IBM. Google is the new Microsoft.

  24. John Doe says:

    Oh my god I love your blog!!!! I agree with so much of what you say. Keep up the great work. I’m glad I am not the only person who sees things for what they are. The brands a person chooses says a lot about who they are and how keen their perception is.

  25. yoshi says:

    Yahoo has the same problem that Microsoft has. No focus. Google (and Apple) both come out with relativity simple products and add features and functionality over a period of time. Microsoft products have always been all over the page quality and design wise. Yahoo stopped focusing on what brought them to the party – google didn’t. Yahoo and Microsoft are made for each other.

    I also agree with another commenter that “.net” has been a success. However “.net” is a development platform. Its not something that an end user would see or even know about.

  26. Ross says:

    Boy do I ever agree with Ronin about share buybacks. Mgmts have to be dumber than dirt to fall for that tact provided ‘free’ from the Banks.

    Look, it is simple. Back when dividend income was taxed at ordinary rates it may have made some sense. No more!

    My rapidly degrading memory recalls International Harvester actually borrowing money to pay their dividend (1975). This when the stock was selling at 6X earnings. The earnings were not ‘real’ in the sense they used FIFO and straight line depreciation overpaid taxes and squandered cash.

    How many companies have borrowed money to buy back stock ??? at higher prices?

    I want to see managements tell the banks to butt out of this financial engineering fraud. The question becomes ‘trust must be earned, not engineered.’

    Interesting B-School project. How much cash has been lost with stock buybacks? Guesses
    anyone?

  27. Advsy says:

    Reminds me of the “If Microsoft built cars” joke that has been out there for ages.

    Here is one of the many links.
    http://www.gmpiv.com/Humor/Computer/IfGMBuiltCarsLikeMicrosof.html

    One of the misperceptions about Microsoft is what they excel at. Contrary to how they have positioned themselves. their true expertise is in Marketing!!

    That is a crucial distinction to make. Steve Jobs has always built better products . It was not until the company learned about the necessity of Marketing that the company took off. Unfortunately, Microsoft understood that very early in the game and managed to make itself a market leader by creating the perception of superior technology. They went unchallenged for so long that they managed to create a form of monopoly which has taken another 10 years to undo.

    The key about Marketing is the “perception” that is created.

  28. That Guy Drinks Beer says:

    I have 9 nine years worth of email correspondence on yahoo’s servers. I also made an explicit choice to use Yahoo over an MS property wayback. I don’t know what I’m going to do, if anything.

    Anyone think this will be interesting experiment in the meaning and value of digital identity?

  29. techy says:

    ross:

    i believe that stock buyback or dividend is a good thing for shareholders, rather than throwing your cash for some growth which may never come?

    am i wrong?

    i also think that stockholders, who are not in for trading, but for long term investment are suckers….who give their money for no say in the company policies…..who buy stocks while insiders sell theirs….who outbid each other and send the stock higher…..with the only hope that they will get higher price from the next bigger fool…..

    am i wrong with this thinking?

    and then they outrun each other for exit, to get whatever they can get for that worth less stocks.. (if stocks can be priced $50-200, within matter of months….does it not prove that they really maybe worthless)

  30. JKB says:

    A few weeks ago, I was invited to join a Yahoo group to keep tabs on a social group I’m involved with. I joined just the mail list rather than set up an account. When I heard the MS-Yahoo announcement, I was “Whew, glad I didn’t give them all the info for an account”.

    Trust and reputation are everything. My high school years were bedeviled by a POS Sears typewriter to write papers. My opinion for low these last 30 years, confirmed by others who have bought Sears POS, is if if says Sears on the label, leave that crap on the table. (caveat: Craftsman handtools excepted, but if it has a motor leave it for the junk pile.)

    And yes, I’ve heard some car advertisement stating “Now with MS connectivity”, my first thought was that can’t be good. My second thought was I definitely don’t want that car.

  31. blisster says:

    Apple designed Google portal in the works?

  32. lux says:

    Hotmail, by the way, was a Microsoft acquisition, and it was originally built on a Unix platform.

  33. Ross says:

    Techy, unfortunately I have to agree. Markets have become casinos. No one has the inclination to understand the accounting, investment returns etc. I was a so called long term investor from the early 80′s til the late 90′s. No more. I started trading in 01 and damn the tax consequences..You HAD to trade in the 70′s or inflation beat your brains out. I have looked and looked for a decent asset class to go ‘long term’ but all I can find is some underpriced farm land but the guys that own it are no longer the Rubes of yesteryear. Damn. I did well in Russian real estate (Moscow flats) sold too soon and they are in a bigger bubble than we are.

    What a boring Sat. Gotta go move some hay. Good luck Techy.

  34. internet-anon says:

    Part of the problem is that based in Redmond, MSFT has become insular, its culture has been institutionalized and smug.

    The best thing that MSFT can do post-YHOO merger is to move all of its online/MSN division employees to Silicon Valley.

    If MSFT-YHOO operations are consolidated to Redmond, watch out below as there are no synergies between a merger of two second-rate companies besides the initial cost savings.

  35. techy says:

    off topic:

    can we really get inflation like late 70s as suggested in the below article?

    http://money.cnn.com/2008/01/22/news/economy/cureupdate.fortune/index.htm?postversion=2008012211

    I thought we are entering deflation (equities, housing etc)
    goods is outsourced and they are not going to go high.

    i know food and energy is the only thing which is going high, but thats due to global demand, right?

  36. a guy called john says:

    yahoo’s toolbar destroyed any trust i had in that company a couple of years back. took up huge chunks of the browser and was a pain to uninstall.

    all the IM programs are sickeningly ad laden — i wanna talk to my friends not think about my tax rebate or whatever.

    google, quite honestly, freaks me out. they know waaay too much about me. i use the customizeGoogle plugin for firefox and hope it does what it says.

    amzn, however, who has my shopping history going back almost a decade, who knows more about me than anyone other than google (or my ISP, i guess) i trust.

  37. Stuart says:

    Even though it took years, Microsoft is finally moving in the direction of Larry Ellison’s model.

  38. donna says:

    Apple works. If it’s broken, they fix it. Quickly. Free. No problem. The interfaces are clean, simple and easy to use.

    Mircosoft? Evil. Inflexible. Broken. XP worked, amazing. So Vista. Broken again. Why? It never ends.

  39. ipodius says:

    Since I have worked in tech since everything was character-based, I’ve seen things come and go. I’m not surprised at this move by MS at all…and if I remember correctly, when MS finally woke up to the browser situation and put its full-force into development, Netscape got crushed. Never discount a very well-funded company that discovers singleness of purpose.

    I don’t understand people’s love affair with Google at all. Their revenue model is linked to one thing…advertising. And how can you trust a company that’s basically told you it’s going to mine all of your data to toss you ads? A company that has intruded ads into every on-line nook and cranny? Google jumped to evil years ago, yet people still continue to act like they are some sort of internet free-spirits. What happens when ads budgets get whacked in a downturn? When people discover that paid-for-search is actually a scam?

    And Google apps? The first thing I do at a company is forbid anyone to use Goggle anything at the corporate level and put corporate communications or data out on the net – full stop. You have to be kidding me. Oh yes, I want the corporate data kept in Google spreadsheets…not going to happen.

  40. bluestatedon says:

    Every business or organization, no matter how large or small, takes on the personality and values of its active owner, chairman, chief executive officer, president, or whatever the big cheese is called.

    Considering the fact that Steve Ballmer is effectively running the day-to-day show up in Redmond, and has been a major player in Microsoft forever, it’s hardly surprising that their products stink.

  41. David Davenport says:

    Culture – “techiness is next to godliness.” That gives them many smart people with high technical competence ..

    So why does Windows Vista have so many technical problems?

  42. Flatulus says:

    The fact is Microsoft doesn’t really dedicate any of its programming expertise to MSN search, I think less than 10 programmers. Maybe, because they’ve been awaiting a Yahoo purchase all this time, but it has made MSN a bear to advertise on.

  43. David says:

    So is anyone here still using Yahoo! Finance for watchlists and charts/quotes? I’m wondering what’s going to happen with this Yahoo service.

    Having scoured some of the blogosphere Friday for more on this, it seems that most people are at least hoping that MSFT has the good sense to leave Finance and the other popular Yahoo! services alone.

    Would like to get your opinions, as I’m planning a round up post on this issue over at Finance Trends Matter and I think the Big Pic crew might have some interesting thoughts, personal feelings on this.

  44. Doug Watts says:

    MSFT has always felt like dealing with the phone company. They’re huge, you’re small, they don’t care about you and they know that you have no choice but to deal with them. The best thing that could have happened to MSFT was getting broken up by the Justice Dept. into smaller, focussed entreprenurial pieces. It may also be that tech companies lose key abilities to innovate if they become too sprawling and huge.

  45. Mike says:

    I would count Xbox Live as a success, and category leader.

    ~~~

    BR: Yes, I mentioned that towards the bottom:

    Once Apple’s products became price competitive, they exploded in sales; Why was that? (iPod Halo? Puh-leeze!). Outside of Windows/Office, MSFT’s biggest success is the X-Box. From the gamers perspective, there is absolutely no PC/Windows involvement whatsoever.

  46. alex norman says:

    BR nails it again–

    In fully interconnected world, with innovation increasing at an exponential rate, “hard” (proprietary tech, patent, copyright, etc.) barriers are no longer as important as they were when Porter started writing about them.

    Ironically, in today’s world the only “durable” competitive advantages are from “soft” barriers to entry — brand, service, trust. These “soft” barriers are very difficult to build and very easy to destroy. Dell is a perfect example.

    More and more, in an environment of infinite choice and no switching costs, trust is the ultimate barrier to entry.

    Ironic, then when we consider the “credit crunch” in this light. Wall Street created the golden goose — structured finance — and killed it through greed and negligence. It sold billions of dollars of securities rated “AAA” to investors around the world that are now proving to be worthless. In doing so, it has seriously damaged the trust in the system itself. Interesting to see where we go from here…

  47. John Borchers says:

    Has anyone ever considered the housing crisis is an effect of a problem or group of problems and it is not the cause of the financial crisis just another effect?

  48. paul stanton says:

    Barry. Microsoft’s success in PC software has a singular pattern. Once a company developed a market (Lotus 123, Wordperfect, Dbase) Microsoft fielded a competitive product and expanded the market through aggressive pricing. Aggressive pricing invariably expanded the market sufficiently for Microsoft to garner a leading market share. Intuit was the first competitor to effectively counter this strategy — by driving market growth before Microsoft could “commoditize” that market.

    It’s a plain fact that in the online space Microsoft hasn’t proven they have the ability to compete effectively. They’ve never truly led the market (only possible exception is their business model with Windows).

  49. toady says:

    MSN was launched right after they destroyed Netscape. Microsoft was especially dictatorial with the attitude of “you’ll buy what we’re selling.”

    I was no techie and explorer messed up netscape so badly, that I was forced to switch to explorer which then took me to MSN which had a really crappy layout, bad search engine, and tried to keep me in their site as long as possible.

    It was that scorched earth business plan that kept me from using MSN. They pissed off millions of new customers by taking away their well functioning search engine and trying to force them to use another semifunctional Microsoft product.

  50. badhaikuguy says:

    Microsoft’s inability to innovate goes back to day one. Gates and Allen were two nerdy upper class arrogant overgrown rug rats marking time at a private Seattle prep school who eventually got Gates’ well-connected lawyer father to asssemble a group of private investors to pony up the 50 grand needed to buy the prototype DOS program from some hapless local schlub, tweak it and resell it to IBM as their PC OS. That exercise was the sum total of their ingenuity and it’s been reflected in MR Softee’s efforts ever since. Gates and Allen innovated nothing. IBM fielded a competition, Gates and Allen knew who had the most complete code to date (and how to best tweak it to Big Blue’s satisfaction)
    and Gates knew where the money well was. Call it the Peter Principle squared. Reminds me of the post WW2 Japanese who pirated US designs at will and cranked out cheap clones that gave rise to the derogatory ‘Made in Japan’ appelation.
    Meanwhile, Gates quietly continues to convert his MS shares to other private more innovative investments and unload the rest onto his Charity while Allen continues to indulge himself in ever larger yachts, overseas villas and real estate speculation.
    All-in-all, somewhat less than the ultimate effort one would expect from two successful tech ‘innovators’, wouldn’t you say?

    Being a card-carrying misanthrope, I trust nothing and no one, particularily financial markets and publicly traded companies. And I don’t have a ‘Homeypage’. I have never used Yahoo and wouldn’t be able to tell you what the opening page of IE looks like, although I use it for my browser. I have approximately 55 shortcuts on my desktop for sites that I can access directly on a daily or weekly basis. For other online access I use Google and type in the URL. It’s a lot faster.

    Mister Softee tries.
    Just can’t get the mojo right.
    Wasn’t meant to be.

  51. Greg0658 says:

    David – I check Yahoo Finance for charts, but I don’t trade, so my interest in a chart is untradeable by quaints (well – maybe still)

    the microprocessor has been the biggest influence in my life, next to the record player and tv

    it has upended my graphics trade for me, diminishing clients with its do-it yourselfness

    Microsoft hostile aquisition of Yahoo … interesting … this computer world is? … I hope the worries of Y2K and related are being addressed with our crop of kids

    high school grad in 77 and I quickly attached to computer use but also quickly got lost in keeping up – ie used it to produce a product with

    when I loaded this thread, I read one post and checked wiki

    no mention of real assets in the Yahoo camp – what do they own in server stacks, where are they, next to an old coal generator or wind turbines?

  52. David Davenport says:

    Ironically, in today’s world the only “durable” competitive advantages are from “soft” barriers to entry — brand, service, trust. These “soft” barriers are very difficult to build and very easy to destroy. Dell is a perfect example.

    Do these “soft” barriers to “entry” also “apply” to “hardware” “manufacturing”?

    If so, why don’t Intel and AMD have more “competitors”?

  53. Dumpster says:

    Stupidest move I have ever seen… in simple terms, they just vaporized their $22,000,000,000 cash hoard and, in addition, will dilute the current shareowners when they issue more Softie shares for the other 1/2 of the $44B “initial” offer….douche move if you ask me.

  54. tekel says:

    agreed. This deal is idiocy. WSJ deal blog had a comment:

    if you tie two rocks together, they still sink.

  55. tucker says:

    Apple is testing their level of trust: DRM, iPhone “locking” (drop in price was a realization that US economy is in recession – had to be done), bundling of buggy browser with OS update…

    On the merger: Has to be done. MS missed the importance of the net by so many years they can’t possibly catch-up without Yahoo.

  56. badhaikuguy says:

    And lest we forget, ‘Yahoo’ is an acronym:

    Yet
    Another
    Hierarchical
    Officious
    Oracle

    as devised by the Stanford U grad students that founded it in 1994. At this point, Mr Softee and Yahoo probably deserve each other.

  57. campbeln says:

    I used to have 3 tabs open up on my (FireFox) browser… WebMail (on my own server), Slashdot, and My.Yahoo. I now have 2 tabs… GMail and Reader.Google (which is where I caught this article, BTW!).

    I still use my My.Yahoo page, but it’s no longer one of the always open tabs (/. is in reader, so it’s still there). So for me, Yahoo is loosing relevance quickly. And if there were a few features included in Reader.Google I’d probably forget about it all together.

    Despite Yahoo’s shenanigans in China I’ve had little other reason to not trust them but their slide into mediocrity is definitely palpable to this user at least.

    Cn

  58. Winston Munn says:

    How can Microsoft miss when Yahoo news produces headlines like this:

    “Artist immortalizes Nuggets’ Anthony on an Etch-A-Sketch”

    Where else can you turn for leading edge news?

  59. grace kim says:

    I can assure you lots of people do not trust Apple. MSFT has fucked over other companies but I always feel like Apple fucks over me.

  60. tt yang says:

    Translation: “I do not know what .NET is so it must suck”

  61. DavidB says:

    Two points:

    If government was run for profit it would be called MSFT

    I think the new name should be even shorter. They should call it Moo because it will still be a cash cow for the executives but alas for the rest of us it will still be a cow

    As for why their products never became popular I think that is quite easy to discern. Microsoft has always been about deciding what the people need and then attempting to market it to them. Not only have they done a bad job of figuring out what people need they have had terrible roll out marketing. The last bit of good marketing hype they made was with windows 98(and maybe Halo 3).

    Secondly, the web is not about things being ‘sold’ to others(though that is probably beginning to change), it is about people discovering niches and self marketing via peer to peer networking. I don’t think there are many big pop sites today that didn’t start out as a niche that people liked and felt they and their friends had to have.

  62. JMH says:

    Here’s a different take on the MSFT pursuit of YHOO. Gates and Ballmer no doubt learned about regulation during the anti-trust days (Litigation I remember telling people to expect after I saw NT at Comdex in the early 90s, but that’s another story…) GOOG can not grow indefinitely for the simple reason that governments will not allow it to happen. Who knows what market share GOOG will have to have before the anti-trust alarms are tripped, but there is a limit. Being number 2 in a huge market is not a bad deal, especially if it can be leveraged appropriately

    MSFT might as well buy YHOO now if they can (regulators again), because in the future, governments will limit the size of GOOG. That will leave the bulk of the search market to the two competitors: GOOG and MicroHoo. The resulting MSFT search business might be less than what GOOG has, but now think about the developer tools MSFT offers. If MSFT makes it really easy to extract info from the Internet *programmatically*, they can allow third party developers to build all sorts of functionality into Windows on desktops and mobile devices. Readers should also note that the majority of employees at YHOO are sales people, not engineers. I suspect MSFT is just as interested in the YHOO sales staff as its technology, if not more so.

    Whether this deal makes sense or not is ultimately a matter of execution, as always. I was skeptical about it, but after thinking about the regulatory angle, it might make more sense.

  63. bt says:

    Barry, you need to get out a little more. Hotmail may not be as popular as it was, but it is no dud. Internet Explorer dominates browser market share. Maybe not in your household, but in the real world it does. .Net is humongously popular and extremely cool to use (for windows based development).

    The others, I agree, are duds. But why is that hardly surprising? Do you know any large company that has been around for more than a few years, produced a wide range of products, and made a winner out of every single product they delivered to market? One of Microsoft’s core strengths is its ability to be tenacious. Maybe they will turn some of these duds into serious contenders, if not outright winners. Maybe not.

    But they have managed to win in the most important department: generate mega profits in a tough, competitive world. It is the only large tech company that managed to grow revenues faster than GDP even through a tough period between 2000 and 2002.

    Regarding Micro-Hoo, I think they are overpaying for Hoo. They sat on huge cash reserves when cash was trash (due to the easy availability of cheap loans and easy IPO markets) but just as the economy is moving in the opposite direction (cash is gaining more respect), they are throwing away their cash reserves in one purchase. Oh well, at least the incompetents at Yahoo are benefiting from all of this. Wealth transfer from Microsoft shareholders to Yahoo shareholders.

  64. Doug Watts says:

    I can assure you lots of people do not trust Apple. MSFT has fucked over other companies but I always feel like Apple fucks over me.

    ???

  65. Doug Watts says:

    Oops, hit button to fast.

    MSFT + Yahoo reeks of negative synergy. Combining two struggling behemoths, both with systemic strategic direction problems and competitors with much more momentum and zing, could be amplifying the worst features of both into one colossal crap pile.

  66. pmorrisonfl says:

    > Our question of the moment: Why has
    > Microsoft never really caught fire online
    > the way they did on the desktop?

    I think the answer to this question lies in Microsoft’s key insight and vision: ‘A computer on every desktop.’. It was exactly the right idea for its time (mid-late 70′s), and MS became the masters of the small computer software universe. They couldn’t conceive of themselves as anything less – or anything else- than the Masters of their world, any more than IBM could see itself as a dinosaur in 1977. They made the desktop the center of the software world, and it pinned their focus and fortunes to making and keeping it that way. The web was viewed first as a distraction, then as something they could own… just like IBM approached the computer hardware business in the 70′s and 80′s. But all the expertise and all the money in the world won’t help you if your view of the world is outdated. New ideas that make the most of the resources available will come to the fore, and the very world view that once helped will now hinder. Google will eat MS-Hoo’s lunch, as MS once ate IBM’s lunch.

  67. bt says:

    MSN was launched right after they destroyed Netscape. Microsoft was especially dictatorial with the attitude of “you’ll buy what we’re selling.”

    MSN was launched before the world embraced Internet. It was a proprietary service to compete against AOL, Prodigy, and CompuServe. When Internet took off in mid 90s, Gates saw the light and vigorously pursued integration with Internet. Proprietary MSN was abandoned and redesigned to be Internet oriented. Gates vigorously pursued browser share and managed to fend off Netscape. Too bad that success didn’t transfer to Internet services.

    Many big time tech leaders have come and gone (AOL, Sun, Netscape, Lotus, IBM, Borland, Wordperfect and that Utah based networking company whose name I can’t recall etc) but Microsoft, under Gates leadership, managed to thrive and grow continuously. It is easy to take cheap shots at the company and Mr. Gates, but Microsoft is a phenomenol success.

    As far as technology goes, why does everyone expect miracles? Windows and other products are complex, engineered products. The world had several choices all along, but Microsoft managed to retain dominant marketshare, even after massive regulation from EU and US governments.

    There are many great technology companies (apple, google, amazon etc) and in a large, complext world, there is place for many dominant technology companies to be leaders. Microsoft happens to be the biggest of them all and also the most consistent of them all (revenue growth, earnings consistency, backward compatibility etc).

  68. alex norman says:

    David–

    To address your point regarding chipmakers–

    If you are implying that Intel and AMD have achieved barrier to entry from constant innovation and scale, yes this is true.

    However, consider the amount of capital Intel has spent over the years developing itself into a consumer brand — “Intel Inside.”

    Why, if they could simply win by keeping one step ahead technologically of any would be competitor (and/or AMD, for that matter) would Intel spend millions of dollars on TV commercials showing people disco-dancing in “clean suits?” Why create the little jingle? Why build a consumer brand? After all, lay consumers know nothing about how a microprocessor works.

    The answer is: because lay consumers know nothing about how a computer works.

    But if you could make them know that an intel chip was THE CHIP inside PC’s, then putting a Intel sticker on the outside of the PC would help them sell their chips.

    Intel remains dominant over AMD because they understood that “hard” competitive advantage –ie constant innovation — is not enough.

  69. jbh says:

    This move will expedite the microsoft fall. The amazing work of the Bill and Melinda Gates foundation thankfully has enough cash for a running start, but it’s assets won’t likely grow from Microsoft much longer.

    The desktop vs. internet difference for Microsoft is due to a series of terrible management decisions starting 12 years ago.

    I am a techie luddite, and I grew up in love with everything Microsoft. I started on a Mac, and moved happily to a pc with Windows 3.1 and have been Window’s ever since. As a finance student I loathed lotus and fell in love with Excel and Word. Whether they bought that innovation or created it is irrelevant, they were smart enough to solve the problem that people didn’t want to memorize codes to do simple things. They were freedom loving enough to keep their system open enough for people to create amazing new things. Microsoft created an entire generation of new workers and jobs.

    Unfortunately, the insight of Neil Stephenson, in his book ‘in the beginning was the command line’, was dead on. Marketing people who could not grasp the idea of selling an abstract product, took over.

    The 12 years since, have seen an erosion of a loyal and trusting customer base. Instead of innovation, we have seen nothing but visual gimmickery so that lazy marketing people can point to something and say, ‘see, new and improved’. 12 years of ignoring change requests (like the simple one’s above in this thread).

    This behavior led to the crack in trust, which led to the attacks, which has led to the perception of security issues (Mac’s and Linux have them too, they’re simply undiscovered), which leads to further hatred.

    Combine the trust dimension, with likability, or the degree to which the products solve a problem. Microsoft at some point made the egregious error, likely driven by Marketing, to organize itself in product groups. This led to a silo culture and product set mess like the one’s written about for 20 years in business school texts. The products simply don’t integrate in a way that saves us time. Unforgivable.

    Instead of sitting with users, grouping them into organizations, and solving their process problems, we have arrogance and stagnation. After all this time, a basic, fundamental process like “order to cash” is still cobbled together in a 1000 ways for every organization. Instead of Sharepoint talking to Money talking to Exchange talking to Outlook and Excel to streamline the process to work the same in every small business, we’re met with arrogance that process doesn’t matter.

    We could all be investing time and money in tough problems like education. But, no. We will waste billions this year learning a new f(&ing ribbon to do the same minute tasks that they solved 12 years ago. By some conservative estimates, the 2-3 minutes per day that vista users must spend responding to prompts everytime they do anything meaningful will waste 900 million hours per year. At an average of $25 of value per hour, that’s a $22.8 billion drag on the economy.

    This is not an evil company. This is a company of arrogance, ignorance and stupidity greater than any in the history of monopoly commerce.

    What once used to be a company that thrived on solving problems that saved time for users now knowingly steals it.

    The fact that Microsoft products online have been duds is due much less to the ‘copycat’ excuse many use to cludge them for lack of innovation, and far more to do with an organization design that could not focus on solving real problems. My iPhone solves real problems because it integrates many many services in one place. It saves lots of time and makes discretionary time more productive and satisfying. My 4 years with a Dell Axim did no such things, even when finally connected to a wifi.

    The merger with Yahoo is yet another example of marketing running the show like drunken prep school morons. The fact that google monetizes visitors so much more than yahoo or microsoft is because google solves real problems for its visitors.

    I say fire Ray Ozzie (c’mon lotus notes and groove are the only products in the world hated more than microsoft’s and you put him in charge??? lemme guess yahoo was either Ray’s idea or one he championed bigtime), and hire Jack Welch to fire everyone and hire some GE process freaks to be your product designers and start solving our problems again.

    Until this or spinoffs are done, I propose an EU/US productivity loss fee be levied on Microsoft for every task that can be measurably shown to be slower today than 5 years ago – a $100B threat ought to get their attention. We all scratch our heads at the productivity flatline of recent years. I think its pretty fair that Microsoft could wield its gerth to make invesments that move that figure 100 basis points in the right direction. Acquiring yahoo will do no such thing.

    C’mon Bill, your amazing work in the world will only be as strong as your work here.

  70. HankP says:

    I’ve been working in the computer industry in the Seattle area for a long time, and I’ve watched MS and worked with almost all their products. I think the source of MS problems for the past dozen years or so is really based on the ad hoc way a lot of their products have been developed and integrated. The secondary reason is the uncoordinated way that they have kept backwards compatibility. The third reason is that they have had a mania for artificial intelligence and user feedback. The result is that they make increasingly complicated products and try to make up for the complexity with “assistance” from the computer. It is interesting that Apple’s comeback over the same time period was fueled by addressing each of these issues very differently than MS.

    I think at this point MS will stay around for a long time, there’s just too much inertia behind their method of doing business. I do think their growth days are behind them. I think the trust issues you mention are hindering the idea of software as a service, and soon some smart person will offer secure, encrypted and bonded on-line services and storage for a fee, and will become fabulously wealthy.

  71. oroboros says:

    I work in the IT world. While I agree that MS products are functional, and not much more than that, I do differ with some of your assessments.

    First off, .NET is wildly successful, I hate to say. It may not be as good as other programming languages out there (I program in a few, including .NET), but management around the USA has bought the ‘interoperability’ spiel hook, line and sinker. .NET has exploded in use over the past several years. Microsoft does know how to market, especially to the unknowing. I personally know how mediocre it is, in several different respects, but I don’t have the option not to use it. That’s the way it is. .NET is a closet hit.

    Secondly, Internet Explorer is still used by about 85% of web users. It may not be as user friendly or modifiable as other web browsers, but most people out there simply don’t care – they want something that works. It’s pre-installed as the default browser, people get used to it. In fact, I think that’s part of the issue you bring up – that people are used to MS’s already kludgey products. But … when it comes to NEW products, well … MS might be in trouble there, particularly when it comes to pleasing people who have gotten used to more intuitive interfaces from other products.

    Thirdly, I think you can add the XBox to the loser list. That division of MS has been losing money since it started, basically. Only recently has it been braking even, but not enough to make up for years of previous losses. XBox Live, however, is very well designed. Perhaps in time XBox will be a hit, but not yet it isn’t, financially.

    Finally, the word I’ve gotten from every techie I’ve talked to is that the proposed MS/Yahoo merger is a train wreak. Personally, I think it’s as good an idea as Mercedes buying Chrysler. It will destroy Yahoo, and do very little for MSN, of that I have little doubt. Yahoo is programmed on a COMPLETELY different platform, and forcing a change (and MS will force) will send the vast majority of Yahoo programmers, in my opinion, elsewhere – voluntarily or involuntarily. To quote some of my friends, I don’t see how two mediocre products add up to a good product. I fear Yahoo Finance will suffer.

    And in the spirit of full discloser, the only Microsoft product I use on my home computer is XP.

  72. Greg0658 says:

    Oops, hit button to fast.
    Doug – do you have a plugin that auto fills the spam blocker box?
    Would that be available or coded by yourself?

  73. Damian says:

    > Our question of the moment: Why has
    > Microsoft never really caught fire online
    > the way they did on the desktop?

    That has a lot to do with the organization of Microsoft and where they make their revenues. Microsoft revenue can roughly be put into two buckets – 50% from Windows, 50% from Office. While people like to think of MSFT as one company, the way they function, internally, is much more like two companies. This creates all kinds of conflicts.

    First of all, the Office team is not going to let MSN/Live/Whatever-they-call-it-next innovate because to innovate would be to challenge their revenue. If the Live service actually was “live” and had a good email client, a good word processor and a good spreadsheet, then fewer people would need MS Office. Thus, the online group, with it’s relatively meager revenue compared to the Office group, has always been forced to bend their business plan around the Office business.

    Google and Yahoo, of course, don’t have the existing enterprise business, so they have no conflicts and can push forward. Microsoft’s inability to destroy businesses to create new ones is their undoing in this area in my opinion.

    As for the rest of the business, I would say the following:

    - Other people have said it, but .NET is a huge success – and this is where MSFT is the best in my opinion – working with developers. I’ve never seen an organization do it better. Sun Microsystems, for instance, couldn’t get anything going with Java because they didn’t know how to work with developers. IBM, however, does.

    - XBox finally cut a profit – and I think it’s successful for the reasons BR said, but also because, again, it doesn’t threaten any existing business.

    - Zune – nuff said. Me too, me too, me too.

    - Windows Mobile – not bad – growing decently, was totally blown out of the water by iPhone.

    One final comment – I can’t remember who said it, but I remember the quote as this: to get a consumer to switch to a newer product, it has to offer 4x the innovation. So everyone that said that there were no “switching costs” with going from Google to, say, Live Search or Yahoo Search, I think, were wrong. Because those products did not innovate at all (or to a meaningful level), people said “why should I switch?” Just a thought…

  74. Guambat Stew says:

    “Micro-Hoo!™”. OK, but how about AHoL-TimeWaster!

  75. Tom B says:

    “Isn’t the real test of ‘Don’t Be Evil,’ that you can stand firm when it is expedient to go with the flow? Well GOOG failed that test when it helps China track down internet users for thought and ideological crimes”

    The fault lies not with Google, but with the spineless US Govt. I KNEW it was wrong for Nixon to open China before they were ready. I KNEW we were wrong to “drop the ball” during Tianamen Square. What’s Google to do? Let Chinese home grown search firms win?

    “I also agree with another commenter that “.net” has been a success.”

    Hardly. It’s used by MSFT drones in Enterprise Intranets. You can’t use it on the web; it’s not cross-platform. And, besides, it’s really got nothing on Java. Still, as an in-house Dev tool, it is indeed widely used.

    “If it says “MSN” on my Yahoo home page it will not longer be my homepage.”

    That’d the ludicrous part. Idiot Ballmer obviously doesn’t understand this at all.

    “Steve Jobs has always built better products . It was not until the company learned about the necessity of Marketing that the company took off.”

    Yes they got the marketing religion. But, consider also that the “quality gap” between Mac and Windows increased about an order of magnitude since OS X matured. Windows still isn’t even UNIX; it has poor security and performance. And it has weak development tools. Ask developers about Apple’s XCode vs. MSFT’s C#.

    “I would count Xbox Live as a success, and category leader.”

    I think XBox only just made money for the first time last quarter, on the strength of Halo 3, written by the former Bungie, Inc, a company that used to do Mac games before MSFT acquired them while the DoJ was snoring. I predict XBox’ll be back in the red next quarter.

    “because in the future, governments will limit the size of GOOG”

    Why? You mean OUR DoJ? I don’t think so; they let MSFT get to–what was it?–96 % market share or so during their glory days? GOOG is nowhere near 96% of search.

  76. Simon Tomlinson says:

    I honestly think that alot of people have scewed the facts so they back up their conclusions in this. If you really look at the differences between Microsoft and Google, and the potential of the Microhoo! merger then you’ll find some obvious reasons for why this situation occured in the first place.

    The majority of Microsoft’s revenues come from applications and services that ‘Web 2.0′ is providing alternatives to. Microsoft could never release an application like Google Aps because it would hinder the revenues they get through Microsoft Office.

    The following products and services provided by Microsoft are successful, regardless of what ‘tactics’ were used to promote them:

    - Windows Internet Explorer: Yes they included it with Windows and Microsoft Office, and yes this killed off Netscape. However, Netscape failed to keep innovating their browser to a point where downloading it was worth the time and hassle. The majority of Internet Explorer’s faults come from it being the most dominant browser in the market. As far as hackers are concerned, why focus on the number 2 browser (FF) when you can focus on the market leader?
    - MSN Messenger: This truely is a great Instant Messaging application. It’s much better than the dud application that Google released, and it’s much prettier than AIM. It’s the market leader out of pure choice by the consumers; because it’s better.
    - Microsoft Windows: The OS succeeded because it choice the right business model. Tying the OS to hardware was never going to work because it was too restrictive, that’s why Apple failed. I honestly believe Apple are in a FAD stage. Their hardware isn’t superior, their OS isn’t ‘groundbreaking’, infact their major advantage was that they could tailor make the OS to specific hardware. Even the ‘glorious design’ of Apple products are flawed… AirBook anyone?
    - MSN Spaces: Great idea, came in too soon. Who wants to be that Facebook, MySpace and Bebo developers didn’t look at that before designing their own.
    - Microsoft xBox: When you consider that ‘Microsoft’s bad image’ stood in the way of winning over tech heads into buying their console they’ve done a remarkable job. Infact, aside from Nintendo’s Wii, which arguably serves a different market to the PS3 and the XBOX, Microsoft have successfully dislodged Playstation from it’s top spot. With help from a tremendous XBOX Live environment.

    The fact is that Microsoft often suffer from disadvantages of their own success. The popularity of the Windows OS, Internet Explorer etc mean that more people focus on exploiting flaws in the applications.

    If Microsoft sucessfully purchase Yahoo! and dedicate resources into making it a sucess, I assure you, it will be one.

    Google are just as flawed as the next company; the only difference is they haven’t had chance to create a bad image yet. Remember that alot of Google’s service and product lineup has come from aquisitions – so this isn’t an argument you can use against Microsoft in these circumstances.

  77. Tom B says:

    “The majority of Internet Explorer’s faults come from it being the most dominant browser in the market. As far as hackers are concerned, why focus on the number 2 browser (FF) when you can focus on the market leader?”

    Wrong on a technological level. IE is flawed because it does a POOR job of rendering web pages which creates much trouble for web designers. Don’t believe me; talk to a few.

    As for the security thing, since IE heavily uses ActiveX, and ActiveX is full of holes, the browser is an easy target.

    “Microsoft have successfully dislodged Playstation from it’s top spot”

    1) Sony chose to add BluRay to all PS3′s which raised the cost. It appears to have helped win the HD DVD/ BluRay battle for them (actually, maybe not– I’d argue BluRay was inevitable anyway), but only time will tell whether it was a good business choice. I expect PS3 will outsell XBox over time.
    2) At least the PS3 doesn’t catch fire. Talk to actual gamers; they like some of the XBox games (eg Halo 3), but the hardware SUCKS.

    I could get started on why Windows and Office are horrible, but I suspect Barry doesn’t want gigabytes of his blog filled up with a Mac/PC flamefest, so I just addressed a few of your obvious errors.

  78. Dina Bass says:

    Microsoft May Borrow for First Time to Buy Yahoo

    Microsoft Corp. will probably borrow money for the first time to finance its proposed $44.6 billion takeover of Yahoo! Inc., Chief Financial Officer Chris Liddell said.

    The company will use available cash and stock to pay part of the $31 a share it has offered for Yahoo, Liddell told analysts today at a conference in New York. Microsoft, the world’s biggest software maker, will raise the rest by tapping the capital markets for the first time in its history.

    Liddell said the company wanted to offer an attractive price to speed acceptance of the bid as it takes on Google Inc. in the Internet advertising market. Microsoft, which had $21.1 billion in cash and short-term investments as of Dec. 31, proposes to pay half the Yahoo purchase price with cash and half with stock.

    “Given the visibility of their cash flow, they’ll probably get a low rate,” said Brendan Barnicle, an analyst at Pacific Crest Securities in Portland, Oregon, who advises investors to buy Microsoft shares. “You can’t find many companies with more stable cash flow than Microsoft.”

    Investors have been asking Microsoft to take on debt for a while, albeit to fund a larger stock repurchase plan, he said.

    Microsoft, based in Redmond, Washington, rose 6 cents to $30.51 at 9:56 a.m. New York time in Nasdaq Stock Market trading. On Feb. 1, the day Microsoft announced its bid, the shares fell 6.6 percent, their largest decline since April 2006.

    Microsoft took on $80 million in debt from AQuantive Inc. when it bought the Internet advertising company for $6 billion in August. Both the AQuantive acquisition and the proposed takeover of Sunnyvale, California-based Yahoo are part of Microsoft’s effort to compete with Google in the $40 billion-a-year market for Internet search services and advertising.