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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."
HAHA! Seriously though, this was done while they were still under the antitrust agreement with the Justice Dept. This is in direct violation and if the court shows this, I'd suspect IBM, Redhat, Novell and others to go after Microsoft; worst case, it could be a class action on behalf of all businesses and Linux distros. This coupled with their shaky OS launch should make for an interesting 2007 for Microsoft.
This is my sig. There are many like it but this one is mine.
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.
Actually, I think Microsoft is scared of everyone.
Well of course they are. Fear is the motivation for being a bully.
KFG
You are thinking about two different models of corporate survival.
I find it easier to think of these things in terms of biological and evolutionary survival techniques.
One option in surviving as a corporate body in the economic ecosystem is to do the Darwinian thing by evolving to become the most efficient and effective at what your niche is. An example of this is the shark. One of the finest hunting species known. Similarly the wild cats.
Another alternative is various molds. They emit a gas which is highly toxic to all other forms of competing mold, thereby carving out a space within which there can be no competition because of the toxic nature of the air. Another exeptional example is Caulerpa taxifolia which is a seaweed growing across the mediterranean seafloor at the expense of all other life. The animals cannot eat is for it too is toxic.
As a corporation, one much protect it's ecosystem space or territory to remove competition. One method is to continually adapt in a highy evolutionary manner, trying to address all the environmental conditions that arise by responding to the liabilities and assets that present themselves. The other methodology is the lock down the environment through aggressive tactics to kill the opposition rather then out-hunt it by means of USPTO litigation, copyright litigation, litagation in general, and supporting litigation of others where it is advantageous. And then there's marketing. How many studies are there showing Windows is superiour to everything else? The price of Coke/Pepsi products is >50% marketing expenses.
"According to the article, Microsoft didn't fund anything. "
You mean the article doesn't say that Microsoft funded anything. At almost the same time as the Baystar deal, Microsoft and Sun both paid SCO large amounts, totalling something like $20-30 million between them, apparently for Unix licenses of some kind. Sun obviously needed a Unix license to put out Solaris. What Microsoft did with whatever it paid SCO $millions for, seems a tad unclear.
(further to that, SCO's court filings in Utah relating to what these two amounts were for directly contradicted their own filings to the SEC, and now Novell has filed a motion for partial summary judgement claiming that 95% of this money is owed to them under the Asset Purchase Agreement that sold the Unix business to the Santa Cruz Operation. SCO only has about $10 million in cash and cash equivalents so if they win, it's game over for SCO).
At no cost to MS, they fooled baystar into wasting a lot of money on a stupid investment, and all the money went to hassle MS enemy #1.
My 7 year old daughter promises a lollypop to her younger brother if he will go and kick someone she is mad at. When he comes to collect, she tells him "No".
Well done Microsoft, and shame on Baystar for falling for such a cheap plot.
don't cut it off www.mgmbill.org
I frequently wonder the same thing and I have come to the following conclusion.
Hunter S Thompson once described a politician running for the president to a moose during mating season. Normally moose are wily creatures. If you go hunting for them they are hard to spot, they are supremely aware of their environment, they can hear and smell you coming from miles away. Once a moose is in mating season though all that flies out the window. The second they hear or smell anything that even resembles a female moose they will charge towards her like... well a crazed moose!. They will crash throught the bush making all kinds of noise, they will leave chunks of their flesh on trees that they broke on the way. They just don't care, just want that female!.
Just as a politician becomes like a crazed moose when running for the presidency a CEO becomes like a crazed mooose when somebody waves money in their face. Once they see that money mind blanks of all other thoughts. Their memory, ethics, morals, bodily functions, wife, children, the planet, shareholders, employees, everything else gets driven out and is replaced with the smell of that money.
When MS waves money in front of a CEO the CEO stops thinking. He completely disregards the dozens of times MS has backstabbed it's partners and thinks to himself "it won't happen to me, those other CEOs were stupid, I am smart and handsome and I deserve this".
I don't want to sound negative, it's only human (and mooose) nature. We would all probably act the same way if somebody waved enough money in our faces. Soon all thoughts of right, wrong, morality, history, and diligence would be replaced by the mansion in the hamptons or that DB9 we have been salivating about.
evil is as evil does
Actually, I think Microsoft is scared of everyone.
Well, yeah. I mean, they're standing atop the marketshare hill -- they have to be scared of everyone. There's no place to go but down; it's not a question of winning anymore, it's a question of hanging on to the top spot for as long as they can. History has shown that such situations don't last forever, but they're going to try and play it for all it's worth. (As anyone in their situation would.) To survive, Microsoft has to constantly be looking for the new competitor that's going to unseat them.
IBM, Kodak, Standard Oil, U.S. Steel -- all of these companies were once the untouchable masters of their respective domains, but all fell from grace eventually. Microsoft knows that it too shall fail eventually, but it's going to prolong it as best it can, and that means they have to be paranoid of everyone and everything that could possibly, at any point in the future, harm their position.
"Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
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
Disclaimer, I'm not even anti-Windows as such, but still:
1. The model capitalism was based on was #1 not #2. The ideal (19th century-style) capitalism idea is basically that of a market of commodities: all products are interchangeable, and a perfectly informed market decides which one offers the best bang/buck.
It's not just an ideological point of view. The role capitalism was supposed to serve was that of, well, basically the ultimate optimizer. Think, sort of, genetic algorithms. If the market needs X at all, there'll be tens or hundreds of competing entities trying to offer the best X at the best price possible. Each will make their own X1 variation at the best price they can manage, and the market will decide on the variant which fits the demand the best.
That was the strength of the western block over, say, the Soviet Union. That in the time the USSR planners decided always too late on what to produce and how much and in what way, the capitalist market could try a hundred ways and let the market choose the best one. That unless deciding "ok, we'll produce Volgas" which may be right or wrong, you can let a hundred people try a hundred different things, and end up with the Ford T1 model which was better and cheaper for most people.
Letting a corporation compete on how "toxic" they can be instead of competing on raw product merits is subverting that whole idea. It's, in fact, no better than the Soviet system. There too how "toxic" and subversive one could be (e.g., having high placed friends in the Party, or _being_ a party official who can send the opponents to Siberia) was most often what decided which model got produced and what got scrapped. We already know how well that went.
2. I wonder and worry about MS. (Or their managers, before someone accuses me of anthropomorphising... human managers.) Their whole history and practices shows that they're just not playing the same game we expect everyone else to play. And which, again, is the whole foundation of capitalism. Again and again, they seem more interested in just killing as many opponents as they can, as opposed to offering a better product or whatever.
Let me explain that better: it seems not even being toxic for survival reasons, but just being toxic for the hell of killing someone. Regardless of whether it's even a survival advantage or not. MS will even gladly take a huge loss (e.g., their XBox strategy) just to try to put someone else out of business. It's stuff that isn't even a survival advantage (making a loss never is), but just the sheer fun of killing someone just because they can.
Basically it's like watching a football game, where one of the players isn't even as much interested in playing the same game or even winning the game, as such, but just in kneecapping as many opponents as he can. Even winning (or losing) is merely a side-effect of killing or crippling everyone in the other team, rather than the goal and purpose of the exercise.
3. And I seriously worry about -- and am disgusted of -- the current US government's bending over to that kind of behaviour. Yes, that being toxic instead of competitive is an option for MS, is pretty obvious. But why tolerate such an entity? Not only it's condoning a major subversion of the very idea of capitalism, but... for _what_? MS is actually contributing very little to the US economy.
Microsoft is employing a grand total of 71,553 employees in 102 countries and regions as of July 2006. Total. Most of them actually support and sales/marketting and management people, and probably more than half off-shore anyway. Even at the scale of IT jobs, it's a spit in the bucket. Out of _millions_ of IT jobs, even after the exodus to India, we're talking maybe half a percent. At the scale of the economy, a helluva lot less.
So, while, yes, a government's priority should be keeping unemployment in check, MS is a spit in the bucket in that aspect. The effect of MS upon unemployment in the US is negligi
A polar bear is a cartesian bear after a coordinate transform.