They gain the following: 1. Following the "Windows Everywhere" strategy, they get a copy of Windows9X/NT/00 on machines that otherwise wouldn't run Windows. 2. While the press release doesn't say this, it is a reasonable assumption that MSFT will get some sort of licensing fee from VMWare for each copy sold. 3. By increasing the number of PCs running Windows, MSFT gains more potential users for other MSFT software such as Office or IE. This enables them to earn more revenues for copies of those products, too. This increases "lock in" at the corporate level ("sure, we can use Linux on the desktop for the geeks who want it, without giving up MS Word and MS Excel as our standard word processor and spreadsheet."). "Lock in" ensures future product sales.
Finally, I think MSFT realizes that the battle for the desktop is over and they won. They don't need the monopoly on desktop OSes any more. They've got additional areas where they own the de facto standards (MS Word and MS Excel come to mind. IE to a lesser extent). I suspect that their attempt to settle w/ the Feds will revolve around lots of apparent sacrifices regarding their OS monopoly. They can afford it since they've got many other areas where they've locked in vast numbers of customers.
Amazon is a sinking ship. During the quarter ended September 30th, they lost over $197 million. That's more than $2 million per day. They have cash (and cash equivalents) of $905 million. At this rate, it is entirely possible that they could be bankrupt in another 12 months.
At the same time, the markets are trading their shares in the $80s right now, giving them a market cap of almost $30 billion. Many, many executives at Amazon (heck, many people manning telephones at Amazon) are dependent on an ever-escalating stock price for a large portion of their compensation. As a result Amazon needs to keep this house of cards from collapsing, lest they lose all of their staff and management team. The way to keep the stock price high is by manipulating the sentiments of the speculators who trade in Amazon stock.
I expect a variety of stunts and announcements from Amazon.com over the next six months or so. Expect to see a variety of "strategic partnerships" a la the U.S. Postal Service's arrangement with Amazon. Expect more "strategic" aquisitions, using Amazon's inflated stock. Expect many, many public maneuvers to convince the speculators that the future is bright, that Amazon is growing, and that Real Soon Now they will turn profitable.
Some legal sabre-rattling over a bogus patent fits right in with that approach. To Joe Daytrader, this will appear yet another validation of Amazon's brilliant prospects. "Look, they've even got a patent on this stuff!" he will exclaim. Thus emboldened, Joe Daytrader will feel that he is justified in buying even more Amazon stock at, say $95.
Eventually time will run out for Amazon. The mathematics are simple and stark: at this rate, they will have no more cash before the end of 2000. At that point, they will be unable to pay their debts. They will be bankrupted.
I suspect that what keeps Bob Young awake at night is the thought that, implicit in his company's stock price, the market is assuming that his company will be generating earnings of approx US$500mm - US$1 billion. In the long run, the market will look for earnings, not buzz. When that day arrives, RH had damn well better have plenty of earnings on their 10-Q, or the bubble will burst.
If I was in Mr. Young's shoes (oh, would that I were!), I'd be looking to do two things, fast.
1) Use my ultra-cheap currency (stock) to buy things of real value (i.e. companies that are actually making money) while the stock is still up in the stratosphere.
2) Use my IPO funds to seed applications and technology that are critical to the success of RH. (No, not "the Linux community" - Mr. Young & Co. are duty-bound to look out for their shareholders, not the rest of us. It is a happy consequence of the GPL, and similar licenses, that what benefits RH will, in most every case, benefit most of us who are using Linux/BSD/whatever, but for his shareholders' sake, I hope that's not his motive.)
It appears from the acquisition of Cygnus that RH is already pursuing strategy #1 with vigor. If the Corel rumors pan out, they'll not only be acquiring earnings and technology, but also acting as a market consolidator.
It appears from these announcements that they also understand the importance (financial and political) of pursuing strategy #2.
Whenever you see an announcement like this, ask yourself: is this deal being done in cash (which, for a company with US$15mm revenues, is quite costly even post-IPO) or in stock (which is getting cheaper by the day)? Discount all-stock deals accordingly.
I (and I'm sure many other readers here) am occasionally pressed into service as first-line tech support for my friends and relatives. It can be quite difficult to talk someone else through even a simple process like using Win9x's "Find" dialog box if you're not right there to show the other person how to do it.
The only reason I would consider using a free Unix of any sort for a non-technically-adept home user would be the remote troubleshooting options. I can envision that life would be a lot simpler if I could just fix a problem remotely rather than talk a neophyte through the solution. I long for the day when I can ssh into my parents' computer 400 miles away and fix a problem for them in 40 seconds, rather than spending 20 minutes trying to talk my Mom or Dad through some GUI to fix their problem.
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They gain the following:
1. Following the "Windows Everywhere" strategy, they get a copy of Windows9X/NT/00 on machines that otherwise wouldn't run Windows.
2. While the press release doesn't say this, it is a reasonable assumption that MSFT will get some sort of licensing fee from VMWare for each copy sold.
3. By increasing the number of PCs running Windows, MSFT gains more potential users for other MSFT software such as Office or IE. This enables them to earn more revenues for copies of those products, too. This increases "lock in" at the corporate level ("sure, we can use Linux on the desktop for the geeks who want it, without giving up MS Word and MS Excel as our standard word processor and spreadsheet."). "Lock in" ensures future product sales.
Finally, I think MSFT realizes that the battle for the desktop is over and they won. They don't need the monopoly on desktop OSes any more. They've got additional areas where they own the de facto standards (MS Word and MS Excel come to mind. IE to a lesser extent). I suspect that their attempt to settle w/ the Feds will revolve around lots of apparent sacrifices regarding their OS monopoly. They can afford it since they've got many other areas where they've locked in vast numbers of customers.
This is a small sacrifce for MSFT, if any.
Amazon is a sinking ship. During the quarter ended September 30th, they lost over $197 million. That's more than $2 million per day. They have cash (and cash equivalents) of $905 million. At this rate, it is entirely possible that they could be bankrupt in another 12 months.
At the same time, the markets are trading their shares in the $80s right now, giving them a market cap of almost $30 billion. Many, many executives at Amazon (heck, many people manning telephones at Amazon) are dependent on an ever-escalating stock price for a large portion of their compensation. As a result Amazon needs to keep this house of cards from collapsing, lest they lose all of their staff and management team. The way to keep the stock price high is by manipulating the sentiments of the speculators who trade in Amazon stock.
I expect a variety of stunts and announcements from Amazon.com over the next six months or so. Expect to see a variety of "strategic partnerships" a la the U.S. Postal Service's arrangement with Amazon. Expect more "strategic" aquisitions, using Amazon's inflated stock. Expect many, many public maneuvers to convince the speculators that the future is bright, that Amazon is growing, and that Real Soon Now they will turn profitable.
Some legal sabre-rattling over a bogus patent fits right in with that approach. To Joe Daytrader, this will appear yet another validation of Amazon's brilliant prospects. "Look, they've even got a patent on this stuff!" he will exclaim. Thus emboldened, Joe Daytrader will feel that he is justified in buying even more Amazon stock at, say $95.
Eventually time will run out for Amazon. The mathematics are simple and stark: at this rate, they will have no more cash before the end of 2000. At that point, they will be unable to pay their debts. They will be bankrupted.
Get out while you still can.
I suspect that what keeps Bob Young awake at night is the thought that, implicit in his company's stock price, the market is assuming that his company will be generating earnings of approx US$500mm - US$1 billion. In the long run, the market will look for earnings, not buzz. When that day arrives, RH had damn well better have plenty of earnings on their 10-Q, or the bubble will burst.
If I was in Mr. Young's shoes (oh, would that I were!), I'd be looking to do two things, fast.
1) Use my ultra-cheap currency (stock) to buy things of real value (i.e. companies that are actually making money) while the stock is still up in the stratosphere.
2) Use my IPO funds to seed applications and technology that are critical to the success of RH. (No, not "the Linux community" - Mr. Young & Co. are duty-bound to look out for their shareholders, not the rest of us. It is a happy consequence of the GPL, and similar licenses, that what benefits RH will, in most every case, benefit most of us who are using Linux/BSD/whatever, but for his shareholders' sake, I hope that's not his motive.)
It appears from the acquisition of Cygnus that RH is already pursuing strategy #1 with vigor. If the Corel rumors pan out, they'll not only be acquiring earnings and technology, but also acting as a market consolidator.
It appears from these announcements that they also understand the importance (financial and political) of pursuing strategy #2.
Whenever you see an announcement like this, ask yourself: is this deal being done in cash (which, for a company with US$15mm revenues, is quite costly even post-IPO) or in stock (which is getting cheaper by the day)? Discount all-stock deals accordingly.
This is a bit of a tangent.
I (and I'm sure many other readers here) am occasionally pressed into service as first-line tech support for my friends and relatives. It can be quite difficult to talk someone else through even a simple process like using Win9x's "Find" dialog box if you're not right there to show the other person how to do it.
The only reason I would consider using a free Unix of any sort for a non-technically-adept home user would be the remote troubleshooting options. I can envision that life would be a lot simpler if I could just fix a problem remotely rather than talk a neophyte through the solution. I long for the day when I can ssh into my parents' computer 400 miles away and fix a problem for them in 40 seconds, rather than spending 20 minutes trying to talk my Mom or Dad through some GUI to fix their problem.