Yahoo Bid shows Microsoft on the Ropes

Ponca City, We Love You writes "One day after the announcement of Microsoft's plan to buy Yahoo, there is an interesting piece from the NY Times analyzing the reasons behind Microsoft's bid and proposing that the bid is a tacit, and difficult, admission that Microsoft did not get its online business right and that online losses continue to mount while Google makes billions in profit. Microsoft "finds itself in a battle where improving its search algorithms and online ad software is not going to be enough," writes the Times. With the Yahoo bid Microsoft is trying to buy a big enough share of the market to be a credible alternative to Google with online advertisers. "This shows just how worried Microsoft is by Google," says David B. Yoffie. "Microsoft has faced competitive threats before, but none with the size, strength, profitability and momentum of Google.""

Comments

Eh?

[Dan100]

How can a company that can afford to pony up $44.6 bn possibly be described as being "on the ropes"?!

Re:Eh?

[tomhudson]

"How can a company that can afford to pony up $44.6 bn possibly be described as being "on the ropes"?!"

Here, let me fix that for you ...

"How can a company that feels it has to pony up $44.6 bn possibly be described as being anything but "on the ropes"?!"

... and its not an "all-cash" bid. 50% Microsoft stock. At least they aren't paying in

At least they're not offering to pay in Bush coins ... yet!

Re:Eh?

[jonbryce]

Look at for example GEC/Marconi. It can happen.

People aren't buying Windows Vista and Office 2007 because they have Windows XP and Office 2003 that does the job just fine, and possibly better, and it costs nothing to continue using it. None of their other attempts to diversify - Zune, X Box, Windows Live etc have been very succesful, so there are problems ahead.

They aren't bankrupt yet, but they are taking action to try and avoid it while they still can.

Re:Eh?

[Wowsers]

Let's google for the answer.

Re:Eh?

[rustalot42684]

Actually, I was helping my neighbour with their new computer the other day, and when I pointed out that you didn't need to pay $150 for Office 2007 Home&Student to write letters, they were very open to the idea of trying out OOo. I think they'll be very happy with it, mostly because they saved $150.

Re:Eh?

[Dan100]

People aren't buying Windows Vista and Office 2007 because they have Windows XP and Office 2003 that does the job just fine, and possibly better, and it costs nothing to continue using it.

Please folks, RTFA. To quote:

[Last year] The Office division alone had quarterly revenue of $4.8 billion equal to Google and an astronomical $3.2 billion in operating profits. The Windows unit is even more profitable.

In fact, Microsoft's Q1 results last year were the best for seven years:

Microsoft stunned Wall Steet with its latest financial results, based on the success of Windows Vista, Office 2007 and the Halo 3 game. First quarter revenues jumped by 27% to $13.76 billion, and profits by 23% to $4.29 billion. Sales beat expectations by more than $1bn.

Microsoft dwarfs Google in both revenue and profit. It's just lost out in the online services market (where despite rising revenues it still makes a loss), and wants to catch up. To do so, it can afford to make investments nobody else can, such as buying out another huge company with a big (if not terribly profitable) portfolio of online services. Together, the "network effect" would make both much more profitable than they are operating seperately.

Re:Eh?

[MightyMartian]

Or not. There's no guarantee that buying Yahoo is going to make it a uber-profitable division, nor does it mean that Microsoft somehow magically gains from it. Yahoo may be the next biggest, but Google dwarfs it. Yes, Microsoft will buy some market share, but even if it manages to maintain it, it's going to be an ironic twist, a sort of online market share version of the Windows/OSX split.

Re:Eh?

[masdog]

Anecdotal, mostly. Office 2007 isn't that bad...but my company (like many others) is having a hard time justifying an upgrade to 2007 when they can see the costs associated with user retraining. I personally own 2007, though, and I have a hard time trying to go back to 2003 or earlier versions.

Re:Eh?

[westlake]

when I pointed out that you didn't need to pay $150 for Office 2007 Home&Student to write letters, they were very open to the idea of trying out OOo. I think they'll be very happy with it, mostly because they saved $150.

MS Office 2007 has been insanely successful at retail.

The runaway best seller in PC software. Bigger than games. Bigger than anything.

Through end of November, U.S. retail PC software sales are up 10.3 percent year over year as measured in dollar volume, according to NPD. By comparison, Office sales are up 50.7 percent, by the same measure and in the same time frame.

"Here's the really interesting statistic," said Chris Swenson, NPD's director of Software Industry Analysis. "Over two-thirds of the dollar volume growth in the U.S. retail PC software market in 2007 can be attributed to Microsoft Office. In other words, the ratio of Office dollar growth to total PC software growth is 67 percent."

Office sales are so big, they make calculating broader PC software retail sales difficult.

Apple has had a great year selling Macs, which has helped boost Office 2004 sales. Version 2004 is doing so well that, ahead of the holiday sales period, Mac Office accounted for about 20 percent of all U.S. retail Office sales, according to NPD.

For Black Friday, Microsoft offered a surprising deal: for about 56 bucks, after rebates, Office 2004 Student and Teacher Edition and the forthcoming Office 2008 Special Media Edition. The new, top-of-the-line Mac Office version would otherwise sell for about $500. The Year of Office 2007

MS Office Home is $120 at Amazon. Retail boxed. Free shipping. Three seat license.

Replacement ink jet cartridges typically list for around $60 the pair. You do the math. If you can afford the consumables, you can afford MS Office. The added expense is trivial.

If his employer has a volume licensing agreement with Microsoft, your neighbor may qualify for a full version of Office for the price of shipping and handling.

Re:Eh?

[smallpaul]

Just about everything you said is incorrect. You said:

You said: People aren't buying Windows Vista and Office 2007 because they have Windows XP and Office 2003 that does the job just fine, and possibly better, and it costs nothing to continue using it.

But the facts are: "Better-than-expected worldwide PC shipments, tougher anti-piracy measures and growing numbers of businesses switching to long-term volume software licenses helped boost revenue for the two Microsoft divisions responsible for Windows and Office to a total of $9.14 billion, 50 percent more than a year ago."

Microsoft has never depended on people going out and buying Windows and Office as shrinkwrapped software. People buy them when they buy computers because it is the easiest thing to do.

You said: . None of their other attempts to diversify - Zune, X Box, Windows Live etc have been very succesful, so there are problems ahead.

But the facts are: "The division responsible for the Xbox 360 video game system swung to a profit on rising sales of games and accessories, which deliver better margins than the console itself. Microsoft said the division is still on track to be profitable in fiscal 2008."

You said: They aren't bankrupt yet, but they are taking action to try and avoid it while they still can.

But the facts say: "Microsoft blew by Wall Street's expectations for a second consecutive quarter." (announced just a couple of weeks ago) Quantitatively speaking they are not only "not bankrupt yet" but not even heading in that direction.

My reference: http://www.kval.com/news/business/14266747.html

Do I think that all is well in Microsoft land? No way: but no massively profitable company with a gargantuan bank account can be said to be "on the ropes". There is a big difference with "perhaps pointed in the wrong direction" and "on the ropes". It would be more accurate to say: "There are indications in the early rounds of fighting that the current champ will have to adjust strategy to win against a promising upstart competitor."

I'm no Microsoft fanboy: I think that they need to fire Ballmer and reform the culture. But that's actually an easier thing to do than the sorts of things that their competitors need to do to become as entrenched and powerful as Microsoft is. Or to put it another way: Microsoft will lose if they don't adjust strategy, but the fight is still theirs to lose. i.e. they are a bit bloodied, not "on the ropes".

Re:Eh?

[HW_Hack]

""How can a company that can afford to pony up $44.6 bn possibly be described as being "on the ropes"?!""

I hardly find this comment "insightful" --- both MS and Intel were at the right place at the right time when the PC was born. Now to be fair both companies also did some good work in the '90s and up to around 2001 (2001 saw the release of XP and the Pentium 4). Thus leading to their 80% - 90% market share positions today. And with that 80%-90% comes a ton of profit so frankly $44 billion is a chunk of change but by no means is a "sign of good health or innovation".

However both had major fuck-ups or major missed opportunities during the earlier years - and continue to struggle today to see the trends - make the right choices - or make the hard choices.

For MS alone:
- Remember Netscape ? MS totally missed the whole Internet trend
- Windows ME
- Their inability to grasp the net as a business model (i.e. Google)
- Making big promises while not focusing on fixing problems - doing neither and producing Vista

And these are just some of the biggies --- now both Apple and Linux are nibbling away at the market space

Re:Eh?

[mrchaotica]

I wonder if the "strategy" was DRM and to adopt uncooperative practices. I guess that didn't turn out so well...

They're still pursuing that strategy, and it remains to be seen how well it turns out. They've lost the using-SCO-as-a-front gambit, but they're still fighting on the bludgeon-ISO-into-making-OOXML-a-standard and kill-OLPC-in-favor-of-Windows-running-stuff fronts.

Re:Eh?

[cellocgw]

sure they can. they can do it if they finance it, IE take loans, IE get into debt.
So you expect Microsoft's web browser to take out the loan? :-)

Ask the grammar police: it's "i.e.," not "IE."

Re:Eh?

[Lord Flipper]

MS Office 2007 has been insanely successful at retail.

Although I realize the Macintosh market is pretty small in comparison, I took a two-minute look at Office 2008 (from the Macintosh Business Unit at MS) and dumped Office:Mac 2004, just like that. They've done, as usual, a terrific job over there.

I grabbed the Standard version. Entourage is much improved (over here in Mac-land, at least), the newer 'main' fonts in Word (across the suite, really) are cleaner and tighter than the workhorses that they are replacing, and the menus and toolbars are relevant and easily negotiated. It's a winner, there's no two ways about it.

It's easy to 'hate' Microsoft, but with the regulatory and judiciary toads sitting on their own asses, who can blame MS for doing what they were all but encouraged to do? A company is expected to be profit-oriented, and 'by any means necessary' is the American Way. Just look around. But the regulators and Courts have no imperial/capitalist 'excuse'. Shame on them.

Even if Google got out of the personal info spy/data-hoarding biz and canceled all their eternally 'in-beta' projects, and went full tilt at the desktop, LAN-and WAN-based publishing, market they could never deal a productivity suite like Office. They wouldn't get near MS's Help and tutorials, either. But then again, so what? They have their own cash cow and the blind trust of millions who are feeding them data, so they don't 'need' an Office suite, do they?

Yahoo's in trouble. On the Mac they just don't cut it. The worst spam filtering on the planet, a mish-mash of messenger versions, etc.

My wild guess on the MS/Yahoo idea? The easy part is: Yahoo's on the ropes. But maybe the MS economics guys sense that MSFT has approached a 'top' in terms of it's stock's value, which is when smart companies like to use inflated stock, rather than cash, to buy up the other guys. Heheh, so if you see an announcement that Google is splitting 2 or 3 for 1, call your broker with market orders to sell; That is, of course, as long as the big switches aren't already jammed. (There was a serious 'bump' in orders of big Nortel switches by guys like Fidelity Investments, in the very late 90s, and lo and behold...)

Also, on a side note, the amount of 'cash' MS has at their disposal is probably dwarfed by other liquid investments. They won't be borrowing for a while, unless the interest rate they're offered is lower than the income on their investments.

Re:Eh?

[Lord Flipper]

Why does this matter? More importantly, why is it only Microsoft that gets bashed with this argument?

This AC poster is absolutely correct. Why the 'Zero' mod?

Let's include Apple here, while we're at it. I'm a long-time Apple user/buyer (who also ran Ataris, SGI's, and a SPARCstation or two), so I'll come with some facts here: For starters, some of Apple's biggest innovations were, in fact innovative, but they where that came from was in putting a better GUI on top of a product, or combination of products that already existed. With some rough edges developed out, and they were successful at it.

iTunes came from SoundJam, and it was owned by Casady & Greene, a company that had a number of winners, but lacked the money and muscle to take it to the next level.

Going back a bit further, to the Dawn of the age of Desktop Publishing, the one piece of equipment that really ignited this entire industry was the LaserWriter. The "Apple" Laserwriter, right? Sure, it was, that's true. But what was it, really? Answer: About a 50/50 collaboration between Canon and Adobe. One for the hardware (engine) and the other for a little old thing called 'PostScript". Apple drew up a front-end. The rest was history.

Bill Gates knew the guys at Apple were on to something, and it was Jobs that turned down Gates' advice to port to the Intel (way back there) and "take over the World." One of Microsoft's hugest cash cows was a direct result of their writing (heheh, sort of... [laughs]) a couple of apps, at the request of Apple, for Macintosh-only, called Word and Excel. And of course OS X is a great GUI on top of the Mach 2.5 kernel developed at Carnegie Mellon University with subsystems from 4.3BSD.

Anyway, AC was right. When I think of innovation I see smart guys, standing on the notebooks of other guys.

Re:Eh?

[tsa]

My father didn't want OO on his new laptop, 'because it is different from MS Office.' So I bought him Office 2007. Mwuhahahaahha!!!

I think MS really SHOULD improve that ...

[QuatermassX]

search algorithm ... it would certainly help make the "service" an actual service! Over the years I've watched as Microsoft has released meh product after meh product. Isn't that their real problem - when the vendor lock-in wears off, they have DAMN weak products.

I have never understood the popularity of Windows with consumers (beyond the obvious monopoly power they wield with personal computer manufacturers), I find their software mostly blech (frankly, anything NOT Word and Excel is just junk) and their online products and services NEVER work as advertised. NEVER.

If I were Microsoft, I'd try and refocus the company culture and align it with the interests of its customers and not ... well ... whatever hellish alliance of businessmen, content producers and bean counters they're currently serving.

I think the XBox 360 points the way, really ...

Re:I think MS really SHOULD improve that ...

[MonoSynth]

If I were Microsoft, I'd try and refocus the company culture and align it with the interests of its customers The 'customers' in the search engine industry are the advertisers, and the main interest of advertisers is reaching as many consumers as possible. A perfect search portal with a perfect algorithm doesn't work. Buying the world's number two might work.

Re:I think MS really SHOULD improve that ...

[KokorHekkus]

Except that the Xbox and Xbox 360 has been major economic sinkholes. From 2002 to 2004 the then Home and Entertainment Division made an accumulated loss for 3.5 billion dollars. From 2005 to 2007 the new Entertainment and Devices division made an accumalted loss of 3.7 billion dollars. So over those 6 years they lost 7.2 billion dollars. Imagine how hard it will to make that money back (plus the lost interest on it) from a division that has a 6 billion revenue per year and never has shown a profit.

Microsoft has tried several directions when it comes to break into new markets but let's face it, they haven't done a very good job of it. Their money comes from the Server and Tools Division and the Business Division (Office etc.). And I don't think it's going to change... perhaps because they aren't used to competing on merits alone.

2004 10-K (has the 2002 to 2004 numbers) http://www.sec.gov/Archives/edgar/data/789019/000119312504150689/d10k.htm 2007 10-K (has the 2005 to 2007 numbers) http://investing.businessweek.com/research/stocks/financials/drawFiling.asp?docKey=136-000119312507170817-22AR89VDNH3I307BANT6DSD928&docFormat=HTM&formType=10-K

Re:I think MS really SHOULD improve that ...

[filbranden]

A perfect search portal with a perfect algorithm doesn't work.

This isn't about the search algorithm. Microsoft is clearly after Yahoo's user base and users that go to Yahoo for search. For what it's worth, they could scrap Yahoo's search algorithm completely, replace it with MSN, as long as they believe that users will still go to Yahoo after that.

Of course, Microsoft has done that before. Look at Hotmail for instance. They couldn't stand the fact that it was not Microsoft technology under it, so they just had to "improve" it on their way. Results? After Microsoft's "improvement" Hotmail ceased to be #1 in webmail and now must be around #957 in market share.

It's probable that if they finally buy Yahoo it will be just the same. Users will deflect in masses. First it will be the users that leave Yahoo because they don't trust Microsoft (say around 5-10%), then it will be the users that leave Yahoo because Microsoft "improves" the service with their own ways of "improvement" (say around 10-20%), and finally it will be the users that leave Yahoo because Microsoft will introduce its silly single platform locked-in technologies, like Silverlight, and they will try to integrate Yahoo with the desktop, which will make Yahoo no longer as "convenient" it is from the point of view that you can access it anywhere without restrictions (say around 20-40% users leaving because of this).

In the end, Yahoocrosoft will lose from 35% to 70% users, and Google will be a yet bigger #1 with a distant #2. I think Microsoft buying Yahoo will be bad for the search/ads market, but it will be good for the OS/desktop/browser market, because Microsoft will certainly weaken from this. I think it's worth to give Google that much power if we get rid of Microsoft in the process, so I'm happy with this and I actually want it to happen, as much sorry I am for Yahoo, but hey, if they take the bid, they're just asking for it.

If I were Microsoft, I'd try and refocus the company culture and align it with the interests of its customers

Yes! Exactly my point. If Microsoft tries to think "as Yahoo does" and doesn't intervene that much, it could use its money and power to actually make it grow and defy Google. But Microsoft is too clever! They'll want to turn Yahoo in Microsoft, they'll want to use their MSN knowledge to grow Yahoo. They'll want to "improve" Yahoo services by migrating them to Windows servers (as with Hotmail), they'll want to "leverage" the desktop on Yahoo services. That will be their biggest mistake. But it's inevitable, there's no way that Microsoft will buy Yahoo and not do that.

Re:I think MS really SHOULD improve that ...

[wertigon]

Silverlight might as well be. I for one don't trust Microsoft will keep up their cross-platform commitment in the slightest; As soon as it's beaten Flash to the ground, the Mac version will mysteriously disappear and the Linux version will be lacking any significant modules. And all other platforms are unable to play the content.

Re:I think MS really SHOULD improve that ...

[Anonymous Coward]

Yes! Exactly my point. If Microsoft tries to think "as Yahoo does" and doesn't intervene that much, it could use its money and power to actually make it grow and defy Google. But Microsoft is too clever! They'll want to turn Yahoo in Microsoft, they'll want to use their MSN knowledge to grow Yahoo. They'll want to "improve" Yahoo services by migrating them to Windows servers (as with Hotmail), they'll want to "leverage" the desktop on Yahoo services. That will be their biggest mistake. But it's inevitable, there's no way that Microsoft will buy Yahoo and not do that.

Here's hoping MS might in fact not pull a Hotmail. Assuming they keep Yahoo's current net revenue level and scrap their current Online division and its bleeding of red ink, it's going to take several decades to pay off the purchase (how many depends on how one values the assets Yahoo has; at best, the price seems to be about $20bn larger than the actual value) Factor in an expensive transition to 'Microsoft technologies' and the time interval will increase quite a bit, as the immediate income will drop abruptly due to massive disruptions. In the end, this looks very much like the biggest winners in the case the purchase goes through would be Yahoo's shareholders, while the biggest losers would be Microsoft's shareholders.

Re:I think MS really SHOULD improve that ...

[curmudgeous]

...In the end, Yahoocrosoft...

Personally, I prefer "Microhoo".

Re:I think MS really SHOULD improve that ...

[msebast]

Is it paranoia when they really are out to get you? Wertigon's description is exactly what happened with Internet Explorer for Macintosh and Solaris. It's not that far fetched to think they might do the same thing again.

The bid is public ... so

[Gopal.V]

I think the public nature of the bid suggests that private behind-closed doors negotiations have failed and they're trying to attempt a near-hostile takeover. YHOO shares have jumped about 10 USD over friday and a lot of us have been getting rid of them. And I wonder who's buying all of these, in reality? Someone who'd pay 31 dollars for a share, when they could instead buy it in-market at 28?

I'd really hope it was some sort of last-ditch effort to put shareholder pressure onto Jerry Yang (yes, I do work at Y! and I do have a very nice job, which I'd be really sad to leave ...). And yeah, read my domain to figure out exactly why I would have to :)

Here's to hoping that it doesn't happen (for YUI, flickr, freebsd, hadoop and del.icio.us!)

Re:The bid is public ... so

[Anonymous Coward]

I made a comment over on another site about hoping that the buyout doesn't happen, specifically because of what Microsoft would do to the useful software/services that Yahoo! has built up and acquired (Y! mail, flickr, del.icio.us). Someone else responded with a "Quit being so childish. Look at all the money they'd make!" comment that quickly got modded up. The sad truth, however, is that one of the major assets that MS is buying is the customers, and if the buyout goes through, quite a few customers will leave. After all, many of us went to Yahoo! after being dissatisfied with the services that Microsoft offered.

Re:The bid is public ... so

[OakLEE]

And I wonder who's buying all of these, in reality? Someone who'd pay 31 dollars for a share, when they could instead buy it in-market at 28?

To answer your first question, they are called risk arbitrageurs. They essentially buy the stock of the target company and short sell the stock of the acquiring company. They make a profit as the target's stock price appreciates to the offer price and as the acquiror's price decreases because of the costs of the takeover (e.g., cash paid out, dilution in stock value, debt taken on).

Their presence, and the reason Yahoo!'s stock only trades at ~$28 is due to the risk that the deal will not close. Deals have to go through a lot of vetting both by the government (DOJ, FTC) and by the parties making them. There is always a risk that at some point along the way either the government will not approve or one of the parties will get cold feet. This is especially true of hostile takeovers, which this offer is similar too, because the target is by its nature an unwilling participant.

As for why Microsoft is not buying in the open market, the short story is that there are a lot of rules and regulations that would just make it a stupid idea. For example, their are lots of disclosure rules that go into effect as an individual (or corporation's) stake in another company increases. Since Microsoft cannot buy all of Yahoo!'s shares on the open market all at once, it would have to fulfill these requirements and essentially announce to the world that it is acquiring Yahoo! before it has done so. This would probably cause a lot of investors to hold out from selling in an effort to get Microsoft to pay more for their shares. If Microsoft is far enough along in its purchases, it would have to capitulate because the cost of backing out and dumping all of its shares would be too high.

That's where the risk arbitrageurs step into the picture in a funcitonal way. Microsoft essentially announces what it will pay. All of the antsy Yahoo! shareholders sell to the arbitrageurs who then must try to help the deal close so they can make their money. This effectively allows Microsoft to offer $31 a share without incurring any of the hold out risk inherent in trying to buy in the open market.

Regulators?

[TubeSteak]

Will the regulators let this happen?
If MS buys Yahoo, the top 5 search engines will becomes the top 4.

Not to mention that many of the 2nd tier search engines are "powered by" Yahoo & MSN

wait

[ionix5891]

so who do we hate this week here on /.

microsoft or google?

Microsoft vs Google

[perlchild]

I wonder if any of Google's customers go there because it's more competitive, has better mindshare, etc... Or if a part of Microsoft's insuccess lies in its reputation, etc... Meaning if they are trying to go anywhere but Microsoft, merging with Yahoo would just doom Yahoo too...

Any thoughts?

Microsoft failed the minute

[Progman3K]

they stopped giving what the CUSTOMER wants.

Whenever you push an agenda different from the client's, the client walks.

SOP

[the_skywise]

This has always been Microsoft's way. They bought "Word" and (depending on how you interpret it) they bought "Dos".

Not 10 years ago people were proclaiming the death knell for Microsoft because it missed the internet... then they bought "Internet Explorer" and... well you know how that turned out.

Microsoft has always made stumbles. Where they've excelled is their resilience to find the right solution and implement it in a good enough/cheap enough fashion that it doesn't make sense to buy the other guy.

Can they do this against Google? From a customer stand-point I'm not sure. I'm not just going to use Microsoft Search(tm) over Google so long as Google remains free and provides decent results. So Microsoft can't really win there. But they can steal ad revenue from Google by making their business/web-ads side more appealing to businesses. Get that, control the ad market and you'll be able to embrace and extend Google...

But this is a sign that Microsoft is "failing"? Not on your life...

Re:SOP

[waa]

I once saw a site that had a detailed list of all the companies and the technologies that Microsoft has purchased over the years. The list was staggering...

In addition to DOS and Word that you mentioned, one thing that people might not know is that Microsoft bought a company called "Webcorp" in the '89-'91 range (I can not recall exactly). This company had created a rather slick Lantastic-like networking system on top of DOS. Being a BBS sysadmin (sysop in those days...) I was one of their beta testers and as a thank you for being a beta tester, I was always given the latest version of their software and watched it grow fro "functional" to "excellent."

long story short... Microsoft bought Webcorp and the Lan technologies they had created and hey... What do you know... Suddenly, out of Windows 3.1 was borne "Windows For Workgroups". Now with NETWORKING!... Another Microsoft triumph and INNOVATION...

The point of my long winded story? Microsoft is _NOT_ an innovator. Unless you define innovation as: a. Purchasing companies, or licensing technologies in order to incorporate them into an existing product or b. Purchase companies or technologies only to shelf said technology in order to promote their less capable, more buggy product.

I for one have been watching this endless cycle for years now (since '89 or '90) and have been fed up with it since just about that time. :(

Re:SOP

[Khuffie]

May I ask...who cares if Microsoft is not an innovator? In your example, Microsoft recognized a technology that, per your admittance, is excellent. So instead of them developing their own networking system for Windows, they realized that incoporating an already developed and tested system is far better for them and their users.

Everyone purchases other companies or licenses technologies from them. Guess what? OS X? Built off BSD and NextOS. Safari? Built off webkit. Google purchased Picasa, Sketchup and Earth Viewer (ie Google Earth). This 'endless cycle' you speak off is not limited to Microsoft.

Re:SOP

[xtracto]

This has always been Microsoft's way. They bought "Word" and (depending on how you interpret it) they bought "Dos".

Exactly what I thought, this is what Microsoft knows how to do best. They bought DOS (CP/M QDOS), they bought SQL Server, they bought powerpoint (forethought), Fox, Sourcesafe, Visio, etc... among LOTS of other companies.

Microsoft does is not a "software" company per-se, it is a technology company which objective is to buy out the competition. They are just doing what they know to do best!

Re:SOP

[Skreems]

And hell, being bought out by Microsoft has become a tradition. There are dozens of startups out there doing their damndest to TRY to get bought out by Microsoft. If you can prove an idea in a startup and get enough word of mouth to get noticed, it's a much, much quicker paycheck to let Microsoft buy you. No slow building of your customer base, no bugfixes, no updates to support new APIs in Windows. Just a quick windfall payment, and then all those pesky details become Someone Else's Problem.

Re:SOP

[man_of_mr_e]

According to this article:

http://www.betanews.com/article/1079773789

Microsoft bought Webcorp in 1993, Windows for Workgroups was first released in October of 1992 according to this document http://support.microsoft.com/kb/126746 from MS. WfWG was in development for more than a year before they bought Webcorp and was released at least several months before.

What's more, WfWG was not just an add-on for Windows. It was really the entire basis of Windows 95. It introduced the VMM model that Windows 95 was basically entirely based on. Also, the networking stack of WfWG was the same stack that was built into NT, which they had licensed from Spider Software and was based on a licensed version of the BSD stack (predating the first open source release of BSD) and STREAMS technology.

In the early days it was IBM

[VampireByte]

In the '80s Microsoft was constantly, and justifiably, worried about IBM, which was a huge powerhouse in those days. Google is not the first serious competitor that Microsoft has faced, IBM could have crushed them 20 years ago.

Re:In the early days it was IBM

[Alien Being]

"IBM could have crushed them 20 years ago."

I disagree. In 1988, IBM was trying to gain some control over the monster it had created by collaborating on OS/2. It didn't work. Gates realized that control of the desktop API was MS's biggest asset so he canned the IBM deal and launched the NT project.

Gates was right, but he did overestimate the importance of the API. He thought that he could beat the Internet with a proprietary MSWindows network. It took several years for him to realize his mistake, bundle TCP/IP and embrace the Net. They used their desktop monopoly to promote IE to dominance of the WWW. Then they tried to turn the Web inside-out with various tricks like Active-X.

MS cannot be crushed, but IMO they are likely to self-destruct. I hope we're witnessing that now.

Overconfidence

[Alomex]

Microsoft has been overconfident in its approach to the internet from day one. First by believing they could deploy an alternative, then ignoring the Netscape threat early on instead of buying them outright (back when they were still up for sale for a few hundred million). They repeated the same mistake with the search engine market, with a myriad of failed search engine initiatives from within rather than buying outright an external player.

About a decade ago, Microsoft balked at paying $8M for one of the key players, about three years ago, they were wincing at spending $20M in a decent search engine effort. "You'll end up paying billions for a search engine company if you don't spend this money now", was my advice. They didn't listen and here we are $46 billion dollars later after the FAST and Yahoo! acquisition.

Salon had a very similar piece today

[Scareduck]

Salon had a very similar piece today in its "How The World Works" column by Andrew Leonard. Leonard can be a very dogmatic statist when it comes to economic policy, but I think he pretty much nailed the tenor of this deal:

Except that this Microsoft bid, made at the late date of February 2008, even if it can't be considered a move made out of desperation, is at the very least a move generated by massive frustration. Try as it might, Microsoft cannot gain ground on Google -- the company that currently claims ownership of the soul of Silicon Valley (as in -- we can have fun and make a bazillion dollars). So where once a Microsoft bid for Yahoo would have been seen as presaging the long-awaited total triumph of Gates and Co. over the freewheeling Valley, now all it does is prove that winning every battle it fights is no longer a Microsoft birthright. Microsoft is playing catch-up from further behind than ever. The future requires a major beachhead on the Web. Microsoft, after at least a decade of Herculean effort, still doesn't have one. So it wants to buy the biggest one it can find.

I wonder what effect a Microsoft buyout of Yahoo would have on various open-source initiatives Yahoo is involved in. Microsoft wouldn't be so dumb as to kill them off immediately -- that would be bad press, and possibly invite retaliation from the next Attorney General -- but their history at Hotmail indicates a revulsion to all things open source.

More than near-hostile...

[DTemp]

Here is a quote from the letter Ballmer wrote to Yahoo:

Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo!'s shareholders are provided with the opportunity to realize the value inherent in our proposal.

That sounds like a full-fledged hostile takeover threat to me... "we can do this the easy way, or the hard way."

I think we can all agree that what Microsoft needs most is a complete change of corporate culture, not Yahoo. This would require a complete replacement of at least 80% of the Microsoft brass, however, so it's not likely to happen until the company is near-dead.

However, if Microsoft realizes that they need to change their corporate culture to attract a bigger audience/customer base, but doesn't want to go through the hassle of actually doing it, then theres one VERY EASY way to impart this realization onto the purchase of Yahoo: for the love of fucking god, DONT FUCK WITH YAHOO!! That means: no changing their servers from FOSS to Windows, no firing all of their managers, and no adulterating Yahoo's way of doing things with Microsoft's shittastic attitude (among other things).

Re:More than near-hostile...

[Dystopian Rebel]

for the love of fucking god, DONT FUCK WITH YAHOO!!

Unfortunately, at the end of the letter under his signature, Ballmer wrote in ballpoint pen, "Microsoft reserves the right to fuck with Yahoo."

Re:More than near-hostile...

[OakLEE]

DONT FUCK WITH YAHOO!!

From a business perspective, I think Microsoft has to fuck with Yahoo. The company's profit margins have been falling hand over fist for the last couple of years, and they've got way to much bloat, as evidenced by the fact that they will have to lay off 1000 people this year. They've gone through at least two CEO changes in the last year, and despite the increasing viewership of their sites, their ad revenue has been flat to decreasing. I think Microsoft must absolutely make management and culture changes to Yahoo unless it wants to see its purchase just fritter away and become the cash sink that AOL has become to Time Warner.

Re:More than near-hostile...

[adrianmonk]

From a business perspective, I think Microsoft has to fuck with Yahoo. The company's profit margins have been falling hand over fist for the last couple of years, and they've got way to much bloat, as evidenced by the fact that they will have to lay off 1000 people this year.

From a business perspective, I think somebody has to "fuck with Yahoo", but I don't think Microsoft is necessarily qualified to do it right. Microsoft and Yahoo compete directly in the same market (online search/portal), and Microsoft has more resources to put behind their efforts, but Yahoo has double the market share of Microsoft. Translation: Yahoo is doing kinda badly, but Microsoft is doing worse. Yahoo does not necessarily have a winning strategy, but Microsoft doesn't either. Change is probably necessary, but there is little evidence to point to the idea that Yahoo would be better off with Microsoft in control than some other alternative.

Ballmer's in charge

[MLCT]

He is now in the driving seat. While MS have always bumbled along with things I now see this getting a bit personal and a bit more precarious. Ballmer is an interesting character. A lot on here (probably rightly) have characterised him as mental. He seems like a deranged and obsessed guy. I mentioned MS "bumbling" along because that is what they did under Gates (sure they embraced, extinguished), but they never took vast risks. Now that Ballmer is in charge I can't shake the feeling that MS's future is a lot more risky - for Ballmer's personal obsession with "destroying" Google could take MS into a very different neighbourhood from Gate's more careful approach. Ballmer is now starting to risk the family silver on beating Google. You only have to look at the comments from the conference call yesterday to realise it - "The market continues to grow, and the leader continues to consolidate position," - never mentioned them by name, but he is clearly obsessed about Google - if I were a shareholder I would be worried that his personal obsession is impairing his business decisions.

Re:Ballmer's in charge

[Dystopian Rebel]

The Ascension of Ballboy to the Throne of Microsoft is the clearest sign that Microsoft has weak senior management and is embarrassingly impoverished in vision.
Ballboy's unwillingness to speak the name of the "fucking guys" he was supposed to "kill" years ago shows how charmless and obsessive he can be. He is like a less personable Joseph Stalin with no big fur hat. His reign of terror will come to an end when Microsoft's shareholders start worrying about ~their~ value.

Microsoft has muscle, big teeth and claws and a walnut-sized brain. People like a company with cool ideas and vision. Google hits many notes perfectly. Apple hits some notes extremely well. Sun can sing but its ears are plugged. IBM gave up singing and now likes to set up the microphones. And Microsoft is the Michael Bolton of software.

(YHOO+MSFT) = $6.5 bn loss in value

[G4from128k]

Looking at the market's response to this announcement, it seems that the merged YHOO+MSFT are worth at least $6.5 billion less than they were as separate entities. Yesterday MSFT lost $19.3 billion in market cap, but YHOO only gained $12.8. (If you factor in NASDAQ's overall rise, then these numbers are even worse -- suggesting perhaps a $9 billion loss of value from the merger.)

Re:Want to know why Google is beating MS?

[thewiz]

Agreed. Don't forget, however, that Microsoft has a habit of MS-itizing everything they buy. Remember Hotmail? It originally ran on a Un*x-variant and Microsoft had many problems with the switchover to NT. Yahoo runs it's services on FreeBSD and Apache; I have the feeling that, if the deal goes through, we'll see similar issues. Doing so will probably drive YahooMS! into a lower rank or destroy it all together.

I'm hoping that Yahoo! sees the light and doesn't accept the offer, EVER!

MS should merge with ...

[iknownuttin]

Exxon Mobile. They're a bit more profitable than Google (ROE: 33.33% (XOM) vs. 22.74% (GOOG))and the synergy towards a truly evil empire would be achieved faster.

I think, I need to send my resume over to MS for the position of V.P. of Evil Strategy because they're just not cutting it anymore. I mean, really, Google is still around!? Geeze!

Re:Want to know why Google is beating MS?

[the_rev_matt]

Actually I think it was Rob Enderle (of all people) on NPR this morning pointing out that Google has their ad network all over the web, whereas the Yahoo/MSFT portal model requires users to go to them. It's a merging of dinosaurs who can't adapt without starting over from scratch. Combined they barely have 20% of the market to google's 60%.

Regardless, they both scare the hell out of me.

[emil]

With rumors of NSA backdoors into MS operating systems, and Google maintaining search history until the end of time, both of these companies practically have the power on their own to become George Orwell's big brother. If we had any sense as citizens and consumers, there would be a huge rush for the exits (yet here I sit on Windows searching with Google).

I don't like this power over society. Whichever one takes more effective means in demonstrating that their power is benign will have my support. Neither has taken effective measures to prove their goodwill towards consumers as of yet.

Oh, and you can throw in AT&T in that mix, too.

Re:Regardless, they both scare the hell out of me.

[fat_mike]

I love you guys. You're the reason I have shitloads of stock in Alcoa Inc.!

schadenfreude for Microsoft and Giuliani

[victorvodka]

Their comeuppance is happening at the same time, so (when I'm not thinking consciously) I have trouble distinguishing in my mind the feeling of schadenfreude I feel for Microsoft (particularly the Vista OS) from the one I feel for Giuliani.

There's no way Microsoft can catch Google just like there was no way anyone could catch Microsoft. That train has already left. The only way to catch Google is for someone to develop something entirely new that can be dominated with new network effects. Something new like Facebook or Ebay.

MS a victim of what made it a success

[C0vardeAn0nim0]

When microsoft started, it was a young company, with a new view of technology. they "got" that microcomputer toy thingie a lot better than traditional mainframe and minicomputer makers like IBM, DEC, honeywell, etc. this allowed them grow exponentially, based not only on their own capabilities, but also on the series of mistakes and fuckups of the competition.

well, now it's against them. now THEY are the "traditional" guys with a backwards vision of computers, while google, yahoo and - surprisingly - apple have a grasp of how people see the digital world. google and yahoo caters to the connected crowd, and apple to the people that sees digital gadgets as fashion statements, two things MS with can't get a foot on.

of, course, MS is not going away anytime soon, the same way IBM, unisys, bull and HP are still around. what they need to do is recognize that they're pretty much irrelevant in those two markets, find a stable but big niche and stay on it. we don't see HP or IBM making atempts on the on-line or digital fashion markets, yet they're still huge and profitable.

so, here's a tip for microsoft: leave online services and fashion for the likes of nokia, apple, google, yahoo, etc. and go take care of what you do well: corporative operating systems like win2k (the only version of windows i dare saying i liked) and office tools.

Re:It is not all bad

[richg74]

I also have a Yahoo! home page that I look at many times a day. (I like it as a way of aggregating news headlines from different sources, along with market indicators, exchange rates, etc.) Although I don't have a very high opinion of Microsoft, I won't necessarily abandon it just because the deal goes through. But my expectation is that it won't be long before Microsoft manages to screw up the good parts of Yahoo! MS doesn't know how to run a Web site (of course, using Windows does give them a considerable handicap) -- try comparing the response times of ???.microsoft.com to Yahoo!, never mind Google.

And the idea that somehow a combined Yahoo! and Microsoft will be able to take on Google in search and advertising must be one of those faith-based initiatives. Two times clueless is still clueless.

With a recession, ad buys with #2 get cut.

[tomhudson]

The 'customers' in the search engine industry are the advertisers, and the main interest of advertisers is reaching as many consumers as possible.

And in a recession, advertisers scale back their ad buys. Instead of buying in the top 2 in any market, they buy from #1 only. Even Microsoft admits that Google is #1.

Re:Eh? _ Madness to their methods (tongue-in-cheek

[az-saguaro]

Now, now. Before all you naysayers and Slashdot cynics read too much into this, consider that there may be some real madness to their methods. Consider this report, on the front page of my newspaper, retrieved by my time-traveling teletype machine.

Reprinted from the Bizarro World Times
April 1, 2010

Headline:
BALLMER PLAYS FIDDLE AS MICROSOFT BURNS
Reported by Peter Perplexed and Wally Whathehelljusthappened

Federal investigators with the SEC and FBI, along with Interpol authorities, today released preliminary information about the sudden and dramatic collapse of Microsoft. Investors, employees and customers, still largely in the dark about the sudden seeming evaporation of the company, were none to happy to hear this news, but at least there was a sense of relief that some answers are starting to come through.

Employees at all Microsoft campuses worldwide showed up to work today to find their buildings padlocked, the workforce locked out. Customer support at all levels, the phones at all of the corporate offices, and the MS website and MSN are all completely offline. Shareholders seem to have lost their entire investment in Microsoft as the NASDAQ has eliminated the company form the exchange. What happened? How could it happen so suddenly and so thoroughly? Where are the company principals (not to mention their principles)?

And even more peculiar, we are starting to receive worldwide reports of their latest operating system, Windows Smokescreen (aka Windows 7) suddenly quitting - wiping hard drives on systems that it is installed on, or otherwise refusing to boot a computer. Here at the Times, we first noted problems when many users started getting the following message: "You do not seem to have the properly signed and verified digital rights to the email and txt files you just created - you are hereby prohibited from using Windows again."

Based on the public reporting by the above agencies, plus investigations from multiple news agencies and tech and financial reporters, we believe that the following is an accurate, albeit sketchy recreation of events at the world's largest software vendor, beginning about 2 years ago, leading up to today's dramatic events:

January 2008 - Numerous events indicate that MS is aware of the fiasco that is Vista, its latest release of Windows. Regardless that the new OS has a variety of merits, it simply has too many demerits, and it has garnered no loyalty nor market share among home and business users - especially among businesses - meaning a serious interruption of revenue and credibility for the company and its flagship product. MS announces an accelerated schedule for creating and releasing its next proposed Windows OS - version 7. Many are skeptical.

February, 2008 - MS announces a hostile takeover bid for Yahoo! No one can understand a legitimate or business-responsible rationale for this move. General opinions take the dim cynical view that this is an expensive but lame attempt to compete with Google, by eliminating the third major player in the online search and advertising market. The offer is made at nearly TWICE the outstanding market capitalization of Yahoo!

March, 2008 - Until now, Yahoo! has made no official reply. The unofficial discussion from Yahoo! execs is that the bid is a disgrace, that they will never capitulate to the rapacious so-and-so's at the Evil Empire, that market consolidation is a losing proposition for the public, that the deal will NEVER go through. Nevertheless, market speculation on Yahoo! and MS stock drives up share prices.

April, 2008 - Over the past month, the MS bid for Yahoo! has risen another 30%, to a net of nearly $58 B (billion), keeping ahead of the speculative price rises and nominal Yahoo! value. All of the fuzzy warm sentiments about corporate independence, freedom, mom, baseball, and apple pie go by the wayside, as money talks. At a hurried and hastily organized Yahoo! shareholders meeting, the merger-buyout is accepted.

May, 2008 - F

Microsoft: More money than brains.

[Futurepower(R)]

The Bush Coins video is excellent!

Not only does the high price show Microsoft's desperation, it indicates that the real lack at Microsoft is not money, but brains. Yahoo is only a web site. The fact that Microsoft has not been able to compete shows the serious mental poverty that is a common symptom of those who have put money first in their lives. (Bush and Cheney are other examples, as the video shows.)

Re:Want to know why Google is beating MS?

[STrinity]

Want to know why Google is beating MS, I mean besides the fact their search engine rocks?

Because Sergei Brin looked at the way MS got pilloried in the mid-90s and decided that Google should have a propaganda arm devoted to convincing people that the company isn't evil. Thankfully for Brin, people are gullible and will believe simple assertions of Google's goodness even after Google reaches the point where they have more information aggregated about every person on Earth than the NSA could ever dream about.

"Don't be evil"

[Dammital]

A lot of people have faith in Sergey Brin's corporate motto. The creation of class B stock at Google, which gives Sergey and Larry ten votes for every share, ensures that they will be able to keep Google from being corrupted, so long as they themselves remain uncorrupt.

Microsoft has no such public image. They were found to use their monopolist position to kill Navigator and hurt Java. Their CEO is belligerent and takes shots at the FOSS community. More recently they've tried to buy the ISO vote for OOXML. They don't trust their own customers, as evidenced by periodic, rude and disruptive Genuine Advantage challenges.

We're about to enjoy a big, fat, open class C block in the US spectrum, courtesy of Google. They purchased Android, and then opened its SDK to the world. In contrast, Microsoft has promoted hardware restrictions, media restrictions, and discourages use of unemcumbered codecs such as Ogg Vorbis.

Which company would you rather do business with, all things being equal? That is Microsoft's problem. They can spend all the $billions they like on buying market share... but they can't buy a reputation. When the FTC clears the Yahoo deal... Microsoft will still be Microsoft.

It adds nothing new

[SnuffySmith]

Microsoft wins by traction, the art of the foist, always tied to the PC (Windows) or tied to a bundle tied to the PC (MS Office). The XBox is the one exception I can think of where people went out and bought their product because it was really good (vid. Zune). The success of Windows-based PDAs and smart phones is an extension of people's use of Office/Outlook and thus an extension of Windows' PC base. Right now, Windows is infrastructure. It's everywhere: in business, in almost everyone's home. It's like asphalt: poured out, steam-rolled, and solidified into semi-permanence, and as in Baltimore, where I live, given to potholes, constant ad hoc repairs, and uneven, poorly done patches.

Internet victories seem to always arise from companies that do one small thing well, an unencumbered product that's new or better than the other guy in a very crucial way. Unless you stay better (Google) or manage to build a suite of stuff that people get accustomed to or dependent upon (Yahoo!) you will fall by the way (Hotbot, Altavista, all the other poor schmoes I'm forgetting).

In the online space, Microsoft has been unable to foist stuff on people, try as they might, and they're too un-nimble to build a toehold technology/site that people fall in love with and then build on that. Everything they do starts out encumbered. In that same space Yahoo survives because early on they built their initial success at ordering the web (before searches did it better) into a mail and portal product people came to rely on. It looks like now Yahoo is merely in a position of holding on to mail and portal clients as long as they can before Google chips them away.

I use Yahoo for: (1) the Yahoo mail plus service with disposable email addresses; this I live by, but use it only for online accounts and stuff I don't want coming to my Gmail account; (2) weather; they rely on Weather.com, and present a three-day forecast that I like better than Google's weather. I don't think people are discovering or switching their homepages to Yahoo.

Gluing Yahoo onto Microsoft doesn't seem to to add anything to either company. How is MS going to build business based on Yahoo's slipping market share? How is a desktop monopoly going to help Yahoo gain share when that desktop monopoly has never succeeded at that? Microsoft typically crowds and clutters web pages with ads and MS branding. Yahoo already has busy-ness and clutter down pat. Both Yahoo and Microsoft could be good if they were to think creatively about how to be good: focus on online services that are better than what Google's strategies will allow (NOT search), or, in MS's case, hone instead inflate their OS (vid. Vista) and Office applications. But Microsoft has demonstrated again and again that they are constitutionally incapable of doing these things with their own or anyone else's technologies.

They never did that

[Tony]

Microsoft was never about giving the customer what they wanted. Microsoft has been about making sure the customer only had access to Microsoft products. That meant they had to have products in the first place, sure; but Microsoft has manipulated the market so they were the only ones available. (This is heavily documented in their anti-trust trials).

They started doing this once IBM gave them an exclusive contract to provide MS-DOS for the original IBM PC. By the time Compaq and co. had their clones ready, MS-DOS was the only game in town. Later, when DR-DOS came around, it started making *serious* inroads. Microsoft then made per-processor deals with the OEMs, making sure a copy of MS-DOS was sold with every processor, whether it *shipped* with the processor or not. This made it economically difficult for the OEMs to sell DR-DOS instead of MS-DOS. (DR-DOS was *far* superior to MS-DOS.)

It's these bundling deals that kept Microsoft at the head of the market all those years. Once they got a significant lead, it became impossible for any other competitor to create a competing product.

Microsoft was helped by some incredibly stupid decisions by other companies, true. (SEE Novell, and their handling of Word Perfect and Novell Office, for instance.) However, it' Microsoft's ability to warp the market to their own ends that has kept them on top, *not* giving the customer what they wanted. (They were so successful at market manipulation, the customer often never knew there *was* an option.)

When there's only one trail, the customer can't walk. That's what monopoly abuse is all about. We don't call it "lock-in" just to amuse ourselves.

MSFT is missing it: Kill Online Advertising

[onebadmutha]

If MSFT put ad-block, on, by default, on internet explorer, and purposefully blocked all online advertising: 1. they'd be heros with the masses, who hate ads. 2. they'd DESTROY google's profit system 3. the story would be back about who can get on the desktop. It's a thought....

Don't be surprised if the deal falls through ...

[tomhudson]

The deal is still below what Yahoo! was worth a year ago ($47 billion), and also, with Friday's rise, not much of a premium http://finance.yahoo.com/q?s=YHOO

Now add in that Microsoft is only offering $21 billion in cash, and the rest in stock, and that's no longer much of a premium for buying out the whole business.

Yahoo! could also do a "poison pill" - buy Redhat. There's no way that Microsoft would be allowed to buy Yahoo! under such circumstances.

Re:Don't be surprised if the deal falls through ..

[Deadfyre_Deadsoul]

Yahoo! could also do a "poison pill" - buy Redhat. There's no way that Microsoft would be allowed to buy Yahoo! under such circumstances. I wouldnt see that as a poison pill, more like red pill or blue pill.

MS buys Yahoo so Live can compete with Google?

[David Rolfe]

Live can never be successful as a competitor in search because verbing its product produces absolute nonsense. This is a case where Microsoft's rather unimaginative 'penchant' for naming its products after common words really bites them in the ass. Their products become generics from the start (vs. xeroxing, kleenex, bandaids, googling, etc.) "My GUI has windows. My office software works, but rarely excels."

Evidence that Live search will never dominate in mindshare:
"I Lived for my old highschool classmates." Huh?
"Just Live my resume." Ok.
"You guys just sit around in your mom's basement Living for pr0n." And?

If people are using Live to google shit, they've lost.

(Captcha is 'hopeless'.)

Silverlight

[falconwolf]

Silverlight might as well be. I for one don't trust Microsoft will keep up their cross-platform commitment in the slightest; As soon as it's beaten Flash to the ground, the Mac version will mysteriously disappear and the Linux version will be lacking any significant modules. And all other platforms are unable to play the content.

I guess as long as you're willing to admit that you're basing that on your own paranoia rather than the current state of reality then there's not much I can say to argue with it.

There are very good reasons to believe MS will in fact do this. MS has already threatened Apple to discontinue Mac software.

Falcon