Microsoft: Still unclear on the concept

I was going to call this post “Decoding the Microsoft memo,” but my friend Kara Swisher has that kind of trademarked already, and I don’t want to owe her any more money than I already do. But reading through the missive from CEO Steve Ballmer that she has posted made me long for someone who could translate it into English, because I don’t think Monkey Boy and I are speaking the same language. It’s not just the egregious use of euphemisms either; there are points where what Steve is saying — about the separation of the Platforms and Services division into two units, for example — shows a fundamental confusion about what Microsoft wants to be when it grows up.

I can’t remember whether Steve used to work at a car company before he joined Bill Gates at Microsoft (I’m pretty sure he worked at Procter & Gamble) but there sure is a lot of talk in the memo about driving. One of the company’s core goals, for example, is to “drive end-user excitement for our products.” My translation of that would be: “Come up with some way to force people to buy Vista and Office, whether they want to or not.” What the hell does “drive end-user excitement” even mean? I’m hoping it has something to do with building better products, but it’s hard to know for sure. Sounds like a blank cheque for the marketing department to come up with some happy videos of families smiling and using Vista to make Grandma a birthday card.

A couple of paragraphs later, Ballmer says that the company needs to “drive developers to create rich applications for Windows” to help promote Silverlight (Microsoft’s version of Adobe’s AIR). How do you “drive developers” to do something? Obviously there are incentives you can offer, but it seems to me that the best way to convince developers to come up with cool apps is to have a great platform that allows developers to do interesting things and reaches the audience they want. Apple seems to have developers beating down its door for access to the iPhone, despite the fact that it often treats developers like crap.

Continue reading

Yahoo: Night of the Living Dead

I think even infamous zombie-movie director George Romero would have felt outmatched by the ongoing Yahoo takeover saga, which has gone beyond drama into farce, then back into drama, then taken a right turn into the bizarre, and now threatens to become The Takeover/Merger That Wouldn’t Die. Microsoft wants to buy it, then it doesn’t, then Carl Icahn gets his fingers in the pie, then Microsoft wants to buy just the search operation, then it wants the whole company again, then it wants to team up with someone like News Corp. in order to dismantle the company — and meanwhile, Yahoo is talking with everyone but your Aunt Sally about a merger to thwart Microsoft.

The latest twist is that Microsoft and Carl are apparently still working on a takeover deal for the company. Icahn has sent a letter to Yahoo — and Microsoft has released its own similar statement — saying the two would be happy to discuss a takeover of some kind, but only if Yahoo’s current board gets the axe — the implication being that either the company gets rid of them, or Carl’s alternate slate is voted in at Yahoo’s annual meeting. In both statements, the potential for a full takeover is outlined. Microsoft’s release says that following a replacement of the board, it would

“be interested in discussing with a new board a major transaction with Yahoo!, such as either a transaction to purchase the ‘Search’ function with large financial guarantees or, in the alternative, purchasing the whole company.”

Continue reading

Microsoft says Yahoo is GFP: Good for parts

According to the Wall Street Journal, the seemingly interminable Microsoft-Yahoo dance has taken a new twist: Microsoft has apparently approached large media entities — including Time-Warner and News Corp. — about joining up for a run at Yahoo, with the ultimate intent of breaking the company into its component parts. I have to say that this makes total sense to me, and in fact, I would argue that such a deal makes even more sense than either a Microsoft takeover of the entire company or a Microsoft acquisition of Yahoo’s search operations.

If Yahoo were a patient at a hospital, the physician in charge might already have scrawled “GFP” on its chart, which to other doctors and nurses is a sign that things are not going well and the patient is “good for parts” — meaning organ donation, etc. (and yes, doctors really do that kind of thing). If nothing else, the past couple of years have shown that while Yahoo has many good assets, the company as a whole is not working. It is trying to do too many things at once, some of its strategies conflict with each other, and there’s an overall lack not just of visionary leadership but (I would argue) of basic functional decision-making ability. In other words, a prime candidate for organ donation.

If such a deal actually came to pass, Microsoft could acquire the search technology and assets that it needs to get out of its distant third-place position in search and search-related advertising, and a media partner could acquire some of Yahoo’s media-related assets — Yahoo Music, the video-related operations, Yahoo News and Yahoo Finance and so on — and other parts of the company could be auctioned off or just shut down. When a company struggles for as long as Yahoo has, it is often (but not always) a sign that it has simply outlived its usefulness, and needs to be either fundamentally restructured, sold or broken apart. I think Yahoo’s time has come. And even Fred Wilson seems to think so.

Powerset: Hail Mary pass? Updated

Update:

The much-rumoured Microsoft acquisition of “natural-language search” startup Powerset is now official, with a statement from MSFT and one from Powerset. Mike Arrington says that sources close to the deal tell him the rumoured $100-million asking price is in the ball park. Not bad for a company that has virtually no actual operating business.

Original post:

Matt Marshall over at VentureBeat says he has it on good authority that Microsoft is planning to make an offer for Powerset, the “semantic search” startup that has been in stealth mode for quite awhile now, popping up only long enough for a party or two, and recently poked its head out with a small-scale demo of its technology as a Wikipedia search engine. The rumoured dollar value for this deal? $100-million. If true, that would be a hell of a payday for something that hasn’t really shown much in the way of spectacular results so far, and is based at least in part on 30-year-old technology that the company licensed from Xerox’s PARC labs. TechCrunch says the deal could still be derailed by the Microsoft-Yahoo mess.

Of course, for a company like Microsoft, $100-million is chicken feed — Bill and Steve find that kind of money stuffed under the couch cushions when they vaccuum the Microsoft HQ. And the idea of an acquisition has been around before, with rumours floating here and there. It’s a painfully well-known fact that Microsoft’s search is a distant third place to Google and Yahoo, which is one of the main reasons the software behemoth continues its on-again, off-again (currently on-again) pursuit of Yahoo’s search business. If it could use Powerset to add natural-language search tools to its arsenal, that might help to close the gap with Google — although as Danny Sullivan has noted many times, we’ve been around this particular racetrack many times before.

Powerset: a Hail Mary pass for MSFT?

Matt Marshall over at VentureBeat says he has it on good authority that Microsoft is planning to make an offer for Powerset, the “semantic search” startup that has been in stealth mode for quite awhile now, popping up only long enough for a party or two, and recently poked its head out with a small-scale demo of its technology as a Wikipedia search engine. The rumoured dollar value for this deal? $100-million. If true, that would be a hell of a payday for something that hasn’t really shown much in the way of spectacular results so far, and is based at least in part on 30-year-old technology that the company licensed from Xerox’s PARC labs. TechCrunch says the deal could still be derailed by the Microsoft-Yahoo mess.

Of course, for a company like Microsoft, $100-million is chicken feed — Bill and Steve find that kind of money stuffed under the couch cushions when they vacuum the Microsoft HQ. And the idea of an acquisition has been around before, with rumours floating here and there. It’s a painfully well-known fact that Microsoft’s search is a distant third place to Google and Yahoo, which is one of the main reasons the software behemoth continues its on-again, off-again (currently on-again) pursuit of Yahoo’s search business. If it could use Powerset to add natural-language search tools to its arsenal, that might help to close the gap with Google — although as Danny Sullivan has noted many times, we’ve been around this particular racetrack many times before.