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The Ballmer Days Are Over
- fleitz 15y ago"just for the sake of others not owning it." Perhaps this is why it's worth $8.5 billion to MSFT and not to others. It's pretty silly to say someone got a bad deal a week after they bought it. If Ballmer has some awesome plan for it that will require a year or two to implement it would behoove him to disclose this so that others could move competitively to destroy the value from such a purpose.
- jakarta 15y agoWhy's it silly? He's buying a commodity business (thats what VOIP is) for 32x earnings. There's a reason M&A is often referred to as a winner's curse -- because winning the bidding typically means overpaying. The synergies execs often talk about almost -always- fail to be realized. Shareholders of Microsoft would have been much better off if the company just bought back $8.5bn in stock. A dividend would have been out of the question due to tax repatriation issues.
- alecco 15y agoNot only a commodity business, a declining one. A specialized desktop application to chat. Hello, it's 2011, people do web-based peer-to-peer video chat for free. Just, ask the Chatroulette users. Free. I bet this will go down as one of the most stupid buyouts in history. http://en.wikipedia.org/wiki/Real_Time_Media_Flow_Protocol http://en.wikipedia.org/wiki/Real_Time_Media_Flow_Protocol
- reedlaw 15y agoSkype is free for video chat too. And I must say it's worth every penny for its phone line in service when compared to free offerings like Google Voice.
- ericd 15y agoHaving Windows users be able to call each other and every other Skype user right out of the box could be pretty interesting.
- sunir 15y agoSkype already has enough market share that bundling with Windows is not likely to generate enough growth to justify the purchase alone.
- qq66 15y agoWindows has ~4 times as many users as Skype.
- brown9-2 15y agoYou mean instead of those out-of-the-box Windows users having to just go to www.skype.com? It's pretty easy to install.
- evgen 15y agoThere is a significant difference between bringing in a new product and having that product be a part of the standard install on every laptop/desktop from the perspective of Enterprise IT.
- Sandman 15y agoYes, but wouldn't that get them in trouble because of the anti-monopoly laws? If I remember correctly, they got sued just for bundling IE with Windows, right?
- adsr 15y agoWindows users could do this already without Microsoft owning Skype. Users who aren't able to install Skype on their own, probably won't use it anyway.
- nandemo 15y agoDo you have a source for "32x earnings"? I suspect it's even worse than that. In other HN thread someone mentioned the price was about 300x earnings, and via google I could find this: Skype's revenues for the first six months of 2010 were $406 million, with a net income of only $13 million.
- adw 15y ago32x EBITDA (the net income is artifically low thanks to one-off writedowns).
- ryanlchan 15y agoI think Microsoft has a master plan. Skype and VoIP in general have all kinds of potential synergies with current MSFT products, difficult to materialize as they may be. Remember that they just put out an incredibly powerful 3D camera called the Kinect. With Skype on Xbox, we could see the beginnings of accessible 3D teleconferencing. Even if it's just Skype, its inclusion further cements Xbox's place in a living room by replacing another utility. Some analysts are forecasting for the telepresence market to grow at ~30% annually through to 2015, with a strong driver being enterprise clients. Why not bundle Skype into Office? Microsoft Communicator already does video chat, but only with other Exchange users. Expanding the install base by 124M users might be the kick in the pants teleconference needs. Whether or not these scenarios are achievable by MSFT is up for debate.
- sunchild 15y agoSkype on Xbox? 3D conferencing? Setting aside the horrendous culture on Xbox Live, does anybody want "3D conferencing"? Most people don't even use Skype for video conferencing today.
- zachrose 15y agoI could see how 3D avatar conferencing (like Xbox Live avatars) might actually be much more appealing than video conference.
- deleted 15y ago[deleted]
- jaz 15y agoSure, Microsoft could have built a skype clone in-house for far less than $8bn. But would people actually sign up and use it - to the tune of 124 million people per month? My guess is no, at least not for several quarters.
- 51Cards 15y agoAgreed, Microsoft didn't over pay for the software, they over paid for the user-base. The user base is what you want.
- abuzzooz 15y agoPerhaps, but I thought Windows Live Messenger have a bigger user base already. Maybe I'm wrong though.
- kenjackson 15y agoIt does. The problem with WLM is that its US user base is somewhat smaller. And the US user base is pretty influential, especially in the mobile space. $8.5B influential? Honestly, I don't see what $8.5B gets you that investing $500M in a Skype partnership wouldn't have. I'd like to think they have some grand plan, but honestly I don't think so. I think they're just sitting on a stack of cash and getting pressure from investors to spend the cash and grow.
- alecco 15y agoExactly. Now I decided to stop using Skype.
- dataminer 15y agoWindows Live Messenger has 330 million active users according to wikipedia, Microsoft could have improved it instead of the current bloated crap it currently is. If it was as lightweight as gtalk, provided voip capability and a good iphone app capability I would start using it and so would all those 330 million active users.
- cabalamat 15y ago
- jmvoodoo 15y agoMicrosoft is entering what Jim Collins would call the 4th stage of decline: Grasping for salvation. Unless something changes dramatically very soon, I wouldn't be placing my bets on Redmond.
- thematt 15y agoThat's an overstatement to say the least. Microsoft still mints money at an incredible rate. They may be doing terrible in the mobile and web space, but Windows and Office will continue to live for a long time, particularly in corporate environments.
- fvryan 15y agoand at least they aren't myspace.
- commandar 15y agoBut unless Microsoft finds a new vision and direction, they're in serious trouble when those cash cows start to go dry. What makes Microsoft's floundering under Ballmer particularly galling is the fact that Microsoft has been acutely aware of this for a very long time; the Sun and Netscape antitrust suits were born of Microsoft's fear of a platform-neutral world. It's not here today, and we're only starting to see the first seeds of it with the rise of rich web applications and platforms like ChromeOS, but it's on its way. Microsoft still has a timeline in the scale of years to work with, but they need to start focusing aggressively on the future sooner rather than later, and, frankly, I don't see Ballmer as being the person capable of guiding the company through a transition they're going to have to make if they're going to survive in the long-term.
- jmvoodoo 15y agoMicrosoft has an execution problem. Plain and simple. Their competitive advantage for Windows and Office are huge, I'm not arguing that. However, if you look at the numbers you'll see that they are in decline. Having an execution problem, long term, kills companies. No matter how great their advantage may be.
- melling 15y agoThe world will be a little better off with a decline of Microsoft. 90% desktop market share is too much. More diversity will be healthier. Chromebooks should take some market share. Microsoft can own 50-70% market share and still be very profitable. They might even be more innovative in other areas.
- brg 15y agoChromebooks as they are now are not attractive. Apple's mobile platform, MacBook, IPad, IPhone, is significantly eating into MS share.
- forensic 15y agoChromebooks actually compete with Windows. Apple basically doesn't - it serves a small segment of premium users. Microsoft is still for the masses and will continue to be unless a competitor undercuts it. Which is precisely what Google is now doing.
- brg 15y agoApple serves students very well. Take a look at current trends in laptop purchases by incoming students. http://itc.virginia.edu/students/inventory/compare/ http://itc.virginia.edu/students/inventory/compare/ If these numbers are indicative of the US as a whole, 45% of new laptop purchases are OSX. IPhone, IPod touch, and IPad are selling well outside of the premium market. From these data points I still feel Apple is the main competitor to MS.
- blub 15y agoStudent trends cannot - by definition - be indicative of the US as a whole.
- brg 15y agoBeing indicative means having predictive power, not being representative. It is often the case that student trends are indicative of larger trends; for instance the number of college graduates looking for employment. As for laptops, looking at data is better than pointless statements: http://www.google.com/trends?q=laptop http://www.google.com/trends?q=laptop Laptop sales correlate with google search trends. The later has a bimodal distribution, with one peak in August and one in December. The former represents back to school sales, and due to its size, it is clear that student purchases of laptops are a significant factor in the market.
- axiom 15y agoMicrosoft issues dividends. Google and Apple don't.
- ghshephard 15y agoThank you. It never ceases to amaze me how many people fail to realize that you need to correct for dividends (One time, and otherwise) when calculating market cap.
- roadnottaken 15y agoCan you (or someone else) please explain this in a little more detail? I understand the concept that a stock that pays dividends won't rise the same way as one that doesn't, but how does one "correct" for this effect to calculate market caps? Are you implying that all those stories about Apple surpassing MSFT's market-cap were misleading due to this fact? Thanks
- T_S_ 15y agoOne way to correct for dividends: assume the dividends are used to buy shares immediately after it goes ex-dividend.
- afterburner 15y agoI'd imagine you could just subtract the value of the dividend from the stock price. Someone correct me if I'm wrong. If you buy a stock as a dividend stock, you might not really want it to rise much, or at all, since you want those dividends giving out the increased value rather than seeing it reflected in the market cap; ie. you want the company paying out the results of expansion.
- InclinedPlane 15y agoAs the article mentions the job of a CEO is to increase shareholder value, dividends are part of that value. MSFT has issued quarterly and sometimes annual dividends which are currently at 16 cents a share. In total, MS has issued $6.35 in dividends since 2005, this is fully 25% of the current stock price.
- mpat 15y agoThe same board that approved this deal would be responsible for appointing a new CEO.
- brown9-2 15y agoExactly - a lot of this rant about how the board should sack Ballmer presumes that the board knows better.
- deleted 15y ago[deleted]
- dstein 15y agoThe bothersome thing about the Skype acquisition is that it's really not going to save them at all. It was a statement purchase. They bought it to show off. They could have bought up a lot of innovative, smaller companies for $8.5B... some that might rebuild their character.
- ChuckMcM 15y agoSo this is just shareholder activism at its finest. A lot of M$ share holders are upset at the Skype deal and with the returns on the stock since Ballmer took over. Nothing new here, just that Microsoft lead by Ballmer has underperformed the market. I keep waiting for these folks to say who they think should be running Microsoft but that doesn't come up a lot.
- j2d2j2d2 15y agoI'd like to see a return of Gates. Microsoft will continue being unvisionary if they bring anyone else to the table. You just can't fake the magic of the founders.
- callmevlad 15y agoAre there any great examples of this besides Steve Jobs and Apple? Didn't seem to work too well for Yahoo.
- j2d2j2d2 15y agoHoward Schultz and Michael Dell come to mind first. Larry Page is the most recent. Yahoo is a good counterpoint, though I'd suggest externalities like a lack of visionary leadership or a lack of intellectual capital, compared to their rivals, are more to blame. Edit: Schultz wasn't a founder, but I believe he was their first visionary leader.
- redthrowaway 15y agoThe Page example is far too recent to tell whether or not it will be successful.
- deleted 15y ago[deleted]
- j2d2j2d2 15y agoAgreed. Mentioned primarily so interested people know to pay attention to changes in Googles behavior as a result.
- asr 15y agoI'm sorry, he lost me at comparing Microsoft stock to Apple and Google over the past 10 years. In retrospect, those are two of the most successful publicly traded tech companies of the period--not a fair comparison. Not to mention those were small companies in 2000. For Microsoft stock to have increased 1200% (as Google's did) it would have probably had to grow into some very significant portion of the world economy. Obviously Microsoft hasn't outperformed over the past 10 years, and it looks like the rest of the article gets into actual substantive critique, but it's hard for me to trust substance from someone who starts out with such an unfair introduction.
- peterb 15y agoIf he had started his graph at 1986, when MSFT first went public, it would be more of a fair comparison.
- alexqgb 15y agoExcept that it would no longer be about Ballmer, and that's who we're discussing.
- brg 15y agoYou are correct in that perspective, but Microsoft is supposed to be the smartest kid in the class. They've said so. And taking them on their word, analysts are supposed to compare it against the other brilliant companies in the sector. Even so, look at the comparison this way. Google and Apple both created and captured new markets; Google with online advertising and Apple with mobile devices. This proves that there was a huge amount of room for innovation and growth in the last ten years. But comparatively, MS has done nothing. It hasn't grown in any direction. And what makes the comparison even more relevant is that MS has actively attempted, and failed, to copy both of the other leaders--Ad center is a failure, MS online strategy is balkanized and schizophrenic, the zune is dead, and WP7 is not gaining traction. That failure is reflected in the chart.
- contextfree 15y agoOver the last decade they broke into the enterprise and built the server & tools business into something with income that exceeds the Windows client business in some quarters. They also appear to have built Xbox/Kinect into a $2 billion/year business. I don't think that's nothing.
- turar 15y agoCEO doesn't control the price of his company's stock. It's silly to use stock price, which is set by the market as a performance indicator. It's makes more sense to compare metrics like net income, free cash flow, etc. And Microsoft isn't doing that badly on those: http://ycharts.com/companies/MSFT/net_income#compCos=AAPL,GOOG&zoom=10 http://ycharts.com/companies/MSFT/net_income#compCos=AAPL,GO...
- Groxx 15y agoParticularly heinous for the Skype purchase: it's amazingly buggy. It's gotten shinier over the years, but they still payed 8.5 billion for a POS.
- ikono 15y agoThat's definitely overstating it. They are better than everyone else in the consumer space. Not enough to be worth 8.5 billion for but the core underlying technology is good(They suck at client development though). People underestimate how hard VOIP is because it sounds so simple.
- togasystems 15y agoThe echo cancellation algorithms, the speed of their sip like algorithm as well as the infrastructure to run their entire network is an engineering marvel. While, Skype's UI could use an update as well as some usability testing, their backend infrastructure is most definitely not a POS.
- johnl 15y agoHardly, here's why: If you can link the phone with desktop applications you have a hit that neither Apple or Google can duplicate. Think of you desktop as a server for your phone. Who better to coordinate the operating systems of the two than Microsoft. If that's what he is thinking, I can't wait to watch the dog fight between the three of them.
- brown9-2 15y agoLet's give Microsoft the benefit of the doubt and assume that this is in their plans. It's 2011, what the heck have they been waiting so long for?
- dillona 15y agoBut the desktop doesn't have long left as "a server for your phone"; servers are about to take over. I predict that this time next year all major mobile operating systems will have some form of cloud sync
- stock_toaster 15y agoYou mean like Apple's facetime or Google's gtalk (not sure about the standalone client, but you can call phone numbers from gmail)?
- brown9-2 15y agoWindows Mobile 6.5 was a powerhouse of a product. Pre-2007 most U.S. buyers of smart phones chose between BlackBerry and Windows Mobile 6.5. Both were small screened devices with a hardware keyboard — with exception to the few HTC devices with stylus based touch screens. Palm was struggling at the time and Windows Mobile was the dominate player in consumer minds, BlackBerry was the beast in boardrooms. This seems off to me. Am I the only one who doesn't remember "Windows Mobile was the dominate player in consumer minds" in 2006?
- ry0ohki 15y agoYou had to be one of the rare consumers who were purchasing a "smart phone". I remember writing software for the platform because it seemed like it was really going to take off, especially when things like the Dell Axim were starting to sell. Side note: Anyone want a Dell Axim?
- bane 15y agoI don't know about 2006 exactly, but I remember tons of people (pre-iPhone) with Windows Mobile phones who bought them for personal use. People who had their phones issued for business always ended up with a Blackberry. Of course I also knew quite a few people with Palm Pilots, so...
- loso 15y agoI spent almost a year at that time watching my girlfriend trying to decide which Windows Mobile phone she wanted. Might have been 2006 or 2007 but Windows Mobile for smart phone purchasers were very popular.
- siglesias 15y ago>> In fact, the acquisition by most accounts sounded more like a move by Ballmer to buy something that others may have wanted to own — just for the sake of others not owning it. This struck me because I'm presently reading Stephen Levy's In the Plex, in which he reports at great lengths about why Google decided not to purchase Skype when eBay had it up for sale: mainly owing to Skype's peer-to-peer technology not being compatible with Google's existing centralized infrastructure. What reason would Microsoft have to think that this reasoning had changed?
- larrik 15y agoIf you look at Microsoft's words and actions in regards to their competitors, they are clearly completely clueless. In fact, "Microsoft people" are often completely blind to everything not made by Microsoft. Reading HN you may never know, but if you've met actual .NET stack developers, or MSCE's or anyone else similar, and you'll find people who make websites and don't know what apache is. Or they'll dismiss open source technologies with ridiculous reasoning. That's what I see when MS speaks. (To be fair, IBM can be the same way, if you are in certain industries, and I would imagine Cisco has the same effect in networking, but that's outside my knowledge)
- hvs 15y agoWay to paint all .NET developers with the same brush. Have you ever actually met any .NET developers outside of your fevered imagination?
- Splines 15y agoThere are certainly company men in the, ahem, company, but one of the problems is that MS makes so many tools that are good enough that using open source tools is really hard to do. Internally, we're told to use MS technology whenever possible. Using open source tools is also a nightmare from a legal perspective, and there are some non-trivial process because of that. It's not hard, but it requires due diligence on our part to ensure we don't expose the company to liability. For the above reasons, it's frowned upon in company culture. I'm facing an internal side-project and am tempted to take a swing at it with nginx, apache and RoR for learning purposes, but the last thing I want is my manager to demo it and get a non-IIS error message along the way.
- dr_ 15y agoWhereas I agree that Microsoft's performance and innovation over the past decade has been abysmal, I'm not sure it's just Ballmer to blame. It all started with the Google brain drain - and that happened while Bill Gates was very much involved at Microsoft. Once the brain drain begins, you lose talent at a rapid clip and no matter how great an idea you may have, it's very hard to execute. So then if you can't build it, you buy it. The product and the talent. Hence the Skype purchase. Here MSFT is buying a business and the people who run it, granted at a hefty price, but Skype is well established around the world and I see it as a better integration with Microsoft than eBay, which never made any sense to me. No it didn't cost Apple 1 billion dollars to build Facetime - but it also didn't cause Skype 1 billion dollars to build Skype. I can't say what it's worth now but I do know that I use it a lot since it's been available on the iPhone - great when traveling abroad. Bing is slowly making strides as a search engine, Windows 7 is selling rather well and Kinect is a huge it. And they have partnerships with Yahoo! and Facebook. Ballmer may need to go, but I really don't think Microsoft is entering the early stages of it's finale.
- AJ007 15y agoBuying Skype might have been the first smart thing Microsoft has done in a while. Skype is a relevant brand to consumers globally, Microsoft just is not anymore. The real question is will Microsoft destroy Skype. Bing search is another good move Microsoft has made. Adcenter, on the other hand is an embarrassing disaster on its own two feet and an ugly nightmare in comparison to Adwords. Adcenter is like a buggy crashing version of Adwords in 2005. Given that Microsoft provides the only real alternative search engine to Google that is pretty damn pathetic. I think you hit the nail on the head with the brain drain. The fact is even with a brain drain companies have assets. Apple was effectively a dead company in the late 90s. Microsoft needs this same type of brutally intense focused leadership right now -- not attention deficit disorder look at me showmanship.
- roc 15y agoTrick is, I don't think Microsoft bought Skype for the consumer service. I think it's solely to make Exchange/Lync a better enterprise offering. MS has apparently realized that there's still a huge opportunity following the analog PBX shakeout of the last decade. They've been pushing Lync pretty heavily lately and I think the Skype purchase was made so they can directly address the things people ask for when they're evaluating Lync.
- JacobIrwin 15y agoMicrosoft's strategy is much more in the 'stability' mode now (similar to Boeing). Most often, exponential growth (as seen in GOOG's chart) occurs in the first ten years of existence. From what I see, once a company is established and the rate of change for acquiring additional market share slows, their stock price tends not to climb up the charts with the same (dare I say 'speculative') uni-directional velocity. Also, MS has had a nice streak of anti-competition battles during Ballmer's tenure. Just one data point that may be relevant to the lack of growth in MSFT share price. Last thing, a chart showing the 100-day Simple Moving Average (post tech burst) may more accurately depict/model the normal MSFT price range under Ballmer's leadership. Interesting blog/review for sure, thanks
- headbiznatch 15y agoI would guess they are mainly purchasing entrenched users of an already-implemented service. This same outcry (largely inspired by the sheer magnitude of the numbers involved) accompanied the MySpace acquisition and then YouTube. One failed miserably, the other is still playing out and might actually have made sense. The prognosticating is, at the very least, as desperate a flailing as the purchase itself. It's a serious business gamble. If you think you know with certainty at this point in time whether or not it will pay off, I submit that you are really into yourself or just really nervous. Skype has millions of users who couldn't care less who owns Skype. We just cannot say at this point that this is a disastrous business decision. P.S. I have been following Skype for a long time and worked for a company that sought to partner with them in their early days (fudge - just dated myself). Beyond the old school "acquire eyeballs" angle, in my humble opinion, their technology is very legit. The algorithms/techniques/architecture/infrastructure they use for audio compression and transmission (and now video) are very finely tuned and if you think it is easy to recreate that just because you have thousands of developers at your disposal, you should reconsider your position.
- michaelpinto 15y agoI think buying Skype was a good move — although letting Ray Ozzie go was a bad move.
- zmmmmm 15y agoI think Microsoft should break itself up and leave Ballmer in charge of the business focussed parts and put a new CEO in charge of WP7, xbox and the other consumer parts. Everyone heaps platitudes on Jobs but the reality is he has no understanding of or interest in business needs. On the other hand, you can make an argument that Ballmer has performed quite well on this front. The simple fact is that it may be impossible to reconcile the different business styles needed to succeed in both the consumer space and the business space. Let them separate and have genuinely different corporate personas and both might succeed more.
- lotusleaf1987 15y ago>Everyone heaps platitudes on Jobs but the reality is he has no understanding of or interest in business needs. On the other hand, you can make an argument that Ballmer has performed quite well on this front. Yeah Apple definitely doesn't need all that cash they're raking in. Move along please, point to something substantive and back it up with evidence before you arrogantly dismiss Steve Jobs. He has valid criticisms such as how will he be replaced? But what you said, absolutely is not backed up by all the available evidence. You then go on to praise Ballmer? Bizarre.
- boyakasha 15y agoI think he means _selling_ to businesses (i.e. B2B as opposed to B2C), not _running_ a business. Also, your nasty tone doesn't help.
- lotusleaf1987 15y agoIt's a pretty ignorant criticism to complain that Apple doesn't do enough B2B, that's like complaining General Electric doesn't do enough pharmaceuticals--it's not even in Apple's business scope to worry about B2B, they make consumer and prosumer products. I treat idiots with the respect they deserve.
- jpadkins 15y ago
- javert 15y agoThis article is too business-centric. MS is sinking slowly because the world is moving to better things than Windows. It's sort of like selling bicycles, when motorbikes are becoming increasingly available.
- Niedar 15y agoIf you take into account stock split and dividends for Microsoft, the total return from 2000 until today is about 13% which is not great but much different than the misrepresentation of a 60% loss. The returns would be much higher if you had not bought in 2000 before the crash which Ballmer could have had no control over. For example if you had bought shares at the end of 2002 than your total return over that time would have been about 130%. I'm not saying that Microsoft hasn't missed opportunities or that Ballmer shouldn't be replaced but its not quite as bad as pictured in that graph.
- JacobIrwin 15y ago13% per annum is better than most top-rated mutual funds earn
- switch 15y agoI think it's a disservice to Ballmer to not consider that every business goes up and down. This chart (courtesy turar) is the real story -> http://ycharts.com/companies/MSFT/net_income#compCos=AAPL,GOOG&zoom=10 http://ycharts.com/companies/MSFT/net_income#compCos=AAPL,GO... It just bothers all the Silicon Valley tech press that Microsoft continues to thrash its competitors. Google makes money via search. Apple started off with fucking mp3 players and now makes 'post-PC' devices. It just bothers SiValley that no one can touch the Windows domination. Microsoft made $5 billion+ in profit last quarter. The CEO who's been in charge for the last 10 years should be given a prize for surviving and growing the company's profits. A new emerging company will always have more room to grow. If you consider each company at its core competency they are all dominating. Google has 64% or so search share. Bing+yahoo get 30% or so. Microsoft has 90%+ desktop OS share. After 16 or 20 continuous quarters of growth Mac is still less than 10%. Apple is dominating smartphones (though Android might slow it down, notably without making any profit itself - unless you want to count it as a defence for mobile search). It's also dominating Tablets and trying to change things - because it doesn't want to fight Microsoft head-on in PCs - Just too difficult given Microsoft's advantages. So each company is dominating its niche and trying to find ways to make its niche dominate the entire tech landscape. Microsoft still being so dominant and the success of Windows 7 point to Sinofsky and Ballmer being God level. Growing profits from a couple of billion a quarter to $5 billion to $6 billion a quarter is extremely impressive. Apple's growth is more impressive - However, that doesn't mean Microsoft's profits are unimpressive and it'd be foolish to take your personal dislike of Microsoft as a reason to discount some really solid work by CEO Ballmer. Finally, Ballmer's first duty is to Microsoft and himself and Gate and Microsoft people. Who fucking cares what the vultures of Wall Street and shareholders who don't do squat think.
- greyman 15y ago>> Beyond that is the fact that Microsoft has 89,000 employees — are you telling me that the company that put a computer in every home couldn’t create a Skype clone? << Yes, that's right. They couldn't create a Skype clone, no chance. Of course, they could create a similar product in terms of functionality, but how many would switch to it from Skype?
- nl 15y agoActually it's a lot worse than that. MS already has a very successful Skype competitor, that does better than Skype in most metrics Windows Live Messenger boasts in excess of 330 million monthly active users with 40 million concurrent, compared to Skype's 170 million and 20 million-30 million concurrent http://arstechnica.com/microsoft/news/2011/05/microsoft-confirms-85-bn-skype-purchase-clarifies-nothing.ars http://arstechnica.com/microsoft/news/2011/05/microsoft-conf... Only 8 million Skype customers pay, so the income they'll get from it is pretty much nothing (compared to other sources of income MS has) Read that whole article - it shows how dumb this purchase really is.
- iamelgringo 15y agoPeople often forget the Microsoft right before Balmer was slapped with one of the largest anti trust lawsuits in decades. People wonder why MSFT hasn't been competing aggressively for the following decade... It's because they've been afraid of anti trust litigation yet again. I've had a couple of conversations with people in semi-upper levels of MSFT management. Long term Microsoft employees are still scarred from that litigation. So much that it still comes up in conversation 12 years after the fact.
- bgarbiak 15y agoNo mention of Nokia deal?
- tomlin 15y agoAnyone else have Florence and the Machine in their heads after reading this headline?
- S_A_P 15y agoSo this seems to be largely a rehash of existing arguments against Steve Ballmer with the added bonus of the skype purchase being thrown in. I cant say that I disagree with the article, but I would agree with others' comments that direct comparisons of MS to Apple and Google are not completely valid. I personally think that there is space for all 3 companies to thrive(which to some degree is the case) since they all have a different niche. It does seem that MS is not the less agile and forward thinking company of the 3. I could liken it somewhat to Detroit vs japan/Korea
- thewisedude 15y agoI get the impression that Ballmer does not have great vision. I dont have evidence to support it. That said, I dont buy many of the arguments made in this article. He is comparing Skype to Facetime. I dont think buying an app for 8 billion dollars make sense. I am sure there is more to skype deal than just the GUI app. The deal may have brought rights for usage of certain IP networks or something along those lines. I am not sure how MSFT is planning to leverage this deal with plans of pushing into the mobile market. I am sure there is something in the works there. Stock Price comparison: There were many Billion dollar companies that are doing fine without a staggering growth seen in Apple or Google, that does not mean that CEO's are doing a bad job.
- dimitar 15y agoThe article doesn't mention Xbox or its more enterprise solutions at all instead focusing more on Apple.
- volandovengo 15y agoIf Windows 8 is a success, I would be quite surprised if Steven Sinofsky didn't become the CEO.
- spinchange 15y agoOne thing I never see considered in comparisons to younger or more nimble and retooled competitors is that by 2000, Microsoft was already a convicted monopolist! For the first few years of the decade, the company was still dealing with governments on two continents on what and how they could compete in the software business. As others have mentioned, in this time frame they have also paid billions in dividends. It may well be time for Ballmer to go, but the comparisons in stock price to Apple and Google over these short time frames don't reflect all the context and dynamics of the share prices.