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If Microsoft does spend a billion on a time machine, my advice would be to buy Apple's 2006 stock and hold it in trust. I have zero confidence that Microsoft in

If Microsoft does spend a billion on a time machine, my advice would be to buy Apple's 2006 stock and hold it in trust. I have zero confidence that Microsoft in 2006 or in 2011 could buy a disruptive company and not destroy it. Which is, I think, the arch point of Gruber's quip. If Microsoft had bought Apple in 2006, does anyone seriously think Microsoft today would have a dominant position in phones, music players, music distribution, and tablets? Would it have a world-class retail chain? Moving forward to 2011, people point out that B$8.5 could buy a lot of startups. Assuming that they could identify it, Microsoft probably could buy the next Apple or Google. Heck, they could probably buy it just by trying to buy everything. But does anybody seriously think that if Microsoft does buy the next big disruptive company, it would still be the next big disruptive company?

Apocryphon 16y ago
Aren't there controls in place to prevent companies from buying up each others' competitors' stock?
- raganwald 16y ago
  There are certain anti-monopolistic laws in place. You might need to put a hundred million aside for lawyers and lobbying to get your deal past the regulators. But given patience and money and a willing seller, I'm sure Microsoft could buy anyone and find a way to get the deal approved. We are talking about a world where Adobe can buy anyone it likes just to kill off their competition.
pragmatic 16y ago
Msft couldn't have bought Apple. They needed to have plausible competition in the desktop market to avoid monopoly regulation, etc. There's a good chance Apple wouldn't exist without Microsoft (and vice versa): http://en.wikipedia.org/wiki/History_of_Apple_Inc.#Microsoft_deal http://en.wikipedia.org/wiki/History_of_Apple_Inc.#Microsoft... Without Office, etc on Mac the adoption could have been severely limited. Would Apple have had the cash to develop the iPod? I think of them as competitive symbiotes. Together they are more valuable than the sum of the parts.
- absconditus 16y ago
  Several people seem to believe that Office was key to Apple's survival. I do not understand this claim. Apple's big markets were pre-press and education. Neither really cared about Office.
  - martey 16y ago
    Do you have a citation to back that up? I do not know about publishing, but I can guarantee you that lack of Microsoft Office compatibility would have been a dealbreaker for several of the Mac owners that I supported when I worked in educational IT. Apple's own marketing campaigns targeted at "switchers" tout this fact: http://www.apple.com/why-mac/its-compatible/#office http://www.apple.com/why-mac/its-compatible/#office
    - absconditus 16y ago
      Apple's current position is nothing like Apple's position then.
- TheloniusPhunk 16y ago
  I was gonna say, didn't Microsoft buy into Apple in order to avoid becoming a monopoly at some point along the way?
fleitz 16y ago
I think you're not giving Microsoft credit, they are ahead of your strategy buying $150 million in Apple stock in 1998 which if they've held it would give them a 7557% (eleventy billion dollar) return.
- raganwald 16y ago
  What am I not giving them credit for? I am saying that they couldn't have managed Apple if they'd bought it as well as Apple managed Apple, not that they did or didn't invest 150 million in Apple as part of an attempt to weasel out of punishment for their illegal monopolistic behaviour.
pragmatic 16y ago
Microsoft has owned Apple stock in the past: http://ask.metafilter.com/30833/How-much-of-Apple-Computer-does-Microsoft-own http://ask.metafilter.com/30833/How-much-of-Apple-Computer-d... From Apple's 2003 SEC filing: "In August 1997, the Company and Microsoft Corporation (Microsoft) entered into patent cross license and technology agreements. In addition, Microsoft purchased 150,000 shares of Apple Series A nonvoting convertible preferred stock ("preferred stock") for $150 million. These shares were convertible by Microsoft after August 5, 2000, into shares of the Company's common stock at a conversion price of $8.25 per share. During 2000, 74,250 shares of preferred stock were converted to 9 million shares of the Company's common stock. During 2001, the remaining 75,750 preferred shares were converted into 9.2 million shares of the Company's common stock."
- raganwald 16y ago
  I was around at the time, I remember it well, and this is entirely orthogonal to my point. My point is that they couldn't buy a company like Apple and do as well as Apple did being independent. Had they bought all of Apple in 1997, Apple would not exist today. Microsoft would probably be doing a lot better due to the lack of a competitor, but you never know, Jobs might have founded another company and be killing Microsoft with it. My post is about management, not stock picking.

Apocryphon 16y ago

Aren't there controls in place to prevent companies from buying up each others' competitors' stock?

raganwald 16y ago
There are certain anti-monopolistic laws in place. You might need to put a hundred million aside for lawyers and lobbying to get your deal past the regulators. But given patience and money and a willing seller, I'm sure Microsoft could buy anyone and find a way to get the deal approved. We are talking about a world where Adobe can buy anyone it likes just to kill off their competition.

pragmatic 16y ago

Msft couldn't have bought Apple. They needed to have plausible competition in the desktop market to avoid monopoly regulation, etc. There's a good chance Apple wouldn't exist without Microsoft (and vice versa): http://en.wikipedia.org/wiki/History_of_Apple_Inc.#Microsoft_deal http://en.wikipedia.org/wiki/History_of_Apple_Inc.#Microsoft... Without Office, etc on Mac the adoption could have been severely limited. Would Apple have had the cash to develop the iPod? I think of them as competitive symbiotes. Together they are more valuable than the sum of the parts.

absconditus 16y ago
Several people seem to believe that Office was key to Apple's survival. I do not understand this claim. Apple's big markets were pre-press and education. Neither really cared about Office.
- martey 16y ago
  Do you have a citation to back that up? I do not know about publishing, but I can guarantee you that lack of Microsoft Office compatibility would have been a dealbreaker for several of the Mac owners that I supported when I worked in educational IT. Apple's own marketing campaigns targeted at "switchers" tout this fact: http://www.apple.com/why-mac/its-compatible/#office http://www.apple.com/why-mac/its-compatible/#office
  - absconditus 16y ago
    Apple's current position is nothing like Apple's position then.
TheloniusPhunk 16y ago
I was gonna say, didn't Microsoft buy into Apple in order to avoid becoming a monopoly at some point along the way?

fleitz 16y ago

I think you're not giving Microsoft credit, they are ahead of your strategy buying $150 million in Apple stock in 1998 which if they've held it would give them a 7557% (eleventy billion dollar) return.

raganwald 16y ago
What am I not giving them credit for? I am saying that they couldn't have managed Apple if they'd bought it as well as Apple managed Apple, not that they did or didn't invest 150 million in Apple as part of an attempt to weasel out of punishment for their illegal monopolistic behaviour.

pragmatic 16y ago

Microsoft has owned Apple stock in the past: http://ask.metafilter.com/30833/How-much-of-Apple-Computer-does-Microsoft-own http://ask.metafilter.com/30833/How-much-of-Apple-Computer-d... From Apple's 2003 SEC filing: "In August 1997, the Company and Microsoft Corporation (Microsoft) entered into patent cross license and technology agreements. In addition, Microsoft purchased 150,000 shares of Apple Series A nonvoting convertible preferred stock ("preferred stock") for $150 million. These shares were convertible by Microsoft after August 5, 2000, into shares of the Company's common stock at a conversion price of $8.25 per share. During 2000, 74,250 shares of preferred stock were converted to 9 million shares of the Company's common stock. During 2001, the remaining 75,750 preferred shares were converted into 9.2 million shares of the Company's common stock."

raganwald 16y ago
I was around at the time, I remember it well, and this is entirely orthogonal to my point. My point is that they couldn't buy a company like Apple and do as well as Apple did being independent. Had they bought all of Apple in 1997, Apple would not exist today. Microsoft would probably be doing a lot better due to the lack of a competitor, but you never know, Jobs might have founded another company and be killing Microsoft with it. My post is about management, not stock picking.