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Microsoft Shown Involved with Baystar and SCO
baryon351 writes "Back a few years ago, when SCO looked like it was hemorrhaging cash, a surprise investment came out of the blue from venture capitalists Baystar. They invested $20 million in SCO and aided their anti-Linux cause, enabling McBride & co. to continue with (now shown incorrect) claims of line-by-line code copying of SCO IP in Linux. Now one of IBM's submissions to the court reveals Microsoft was behind it after all. Baystar's manager says about Microsoft's Richard Emerson: 'Mr. Emerson and I discussed a variety of investment structures wherein Microsoft would backstop, or guarantee in some way, Baystar's investment ... Microsoft assured me that it would in some way guarantee BayStar's investment in SCO.' Despite the denials about their involvement, Microsoft helped SCO continue this charade — and on top of that halted all contact with Baystar after the investment, reneging on their guarantee."
Actually, I think Microsoft is scared of everyone. It seems like they feel the need to compete with everyone after they've brought an interesting product to market and they decide they can make some money there. Now one might say that they've decided they can do a better job in that market spot, but they never really do a better job. The X-Box 360 may or may not be an exception to this, but I really wish, for the sake of everyone that uses their products and everyone else that needs to deal with them they they'll stop trying to run everyone else into the ground and just make a core set of products the best they can be. There's no innovation, they kill everything they make through design by committee.
Microsoft issued an relatively unusual press release in mid-September 2003, announcing that Emerson was leaving to "spend more time with his family". The announcement got published in the New York Times, and Emerson's supposed end date was August 31, 2003. He would consult on "complicated transactions".
Emerson's position as "SVP Corporate Development" reporting directly to Steve Ballmer was abolished on his resignation, and the Corp Development division demoted to supervision by the CFO. After a period, Brian Roberts, Emerson's long time deputy was promoted to run the division. Robert's left Microsoft in 2005 to work with Emerson at his new position at Evercore Partners. Roberts and Emerson have been associated since running telecomunications portfolio in the dot-com days at the investment bank Lazard-Freres.
Emerson made political contributions to the Bush re-election campaign in mid-September 2003, and listed his occupation as Microsoft Executive, so his August 2003 resignation is a bit atmospheric or conveniently backdated.
Emerson had been given a 12 Million dollar loan as a signing bonus to MSFT in 2000. A mid-September 2003 proxy noted that he was paying the loan back with vested stock options. The options were underwater, but had a positive Black-Scholes valuation based on their future potential to be profitable. Emerson used this positive valuation to retire the loan on a cash free basis.
Emerson had little public trace through most of 2004, and then acquired a position at Evercore Partners, a mergers and acquisitions investment advisor. Evercore has since IPO'd, and is traded as EVR.
Emerson and a Baystar principal Andrew Farkas were both listed as advisors/investors in a NYC Venture, I-Hatch Partners. A Farkas relative (Younger brother, I believe) is the fund executive. This is good evidence that the Baystar and Emerson relationship had alternative means of communication, and unreturned phone calls from MSFT headquarters should be considered a convenient fiction.
Emerson and deputy Roberts also show up in July 2003 SEC documents as the signatory for the Microsoft investment in IMMR (Immersion) that had patent suits against Sony and MSFT. The MSFT stock investment in IMMR ended the Microsoft portion of the suit (for game controllers) while ensuring the suit against arch-rival Sony would continue. This "investment in a strategic lawsuit" has echoes in the Baystar Pipe deal occuring just months later. We can conclude that the IMMR and SCOX investments are implementations of a similar strategic idea. Sources:1 19312503051346/ddef14a.htm 0 3E6DB103AF933A1575AC0A9659C8B63 t y=SEATTLE&st=WA&;last=EMerson&first=RICHARD
http://news.com.com/2100-1022_3-5079594.html
http://www.sec.gov/Archives/edgar/data/789019/000
http://query.nytimes.com/gst/fullpage.html?res=95
http://www.newsmeat.com/fec/bystate_detail.php?ci