

Microsoft Crosses The Line - nickb
http://www.techcrunch.com/2008/07/08/microsoft-crosses-a-line/

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raganwald
Microsoft/Ballmer's behaviour has been entirely consistent with their
reputation as take-no-prisoners bullies. Bullying is all about destroying and
humiliating people. It is all about intimidating a crowd of people by making
an example of someone.

I seriously doubt anyone, even Microsoft shareholders, are cheering Ballmer
on. Actually, I revise this: I especially doubt Microsoft shareholders are
cheering Ballmer on.

The key here is to understand what "Destroying Yahoo" means. Does it mean
pillaging Yahoo and taking its assets? No. Instead, destroying Yahoo means
putting its people and customers on the open market.

Who stands most to gain from Yahoo's people and customers being on the open
market? Google, the market leader. ABove and beyond the deal Google has
already done with Yahoo, Google has the most to gain from Yahoo' slide into
irrelevance.

When at the end of this process Microsoft acquires Yahoo for a pittance,
Ballmer will congratulate himself for paying so much less than B$44. But this
is like setting fire to a house you wish to buy and then allowing its
neighbours to build on what's left of the property.

Ballmer may take a victory lap, but I believe that Google will be the ones
drinking champagne.

~~~
bigbang
The bullying by Ballmer and co, is 1.Throw the current board out bcos it didnt
agree with MS. The current board can be thrown by MS by telling that there is
a chance that they come back, so shareholders will vote for Carl. 2.Grab Yahoo
for even cheaper as with Carl on board there is no other option for growth
other than by selling.

~~~
gizmo
No, the board should be thrown out because it acted against the wishes of the
shareholders. And in a public company the shareholders are king. Ballmer has
nothing to do with this. Carl is in it for the money - so he probably wants to
chop the company up.

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byrneseyeview
"Since then, Yahoo has quite _literally_ prostrated themselves before
Microsoft to get a merger done, even perhaps at a price much lower than
Microsoft’s original bid."

You know, I thought this was an error. But look!

"Pronunciation

IPA: /ˈlɪtəɹəli/, SAMPA: /"lIt@r@li/

    
    
       1. In the direct, word for word sense. With neither idiom nor metaphor.
    

"When my sewing kit fell off of the barn loft, I literally had to look for a
needle in a haystack."

    
    
       2. In a non-direct, figurative sense. Not literally.
    

"When I saw that Michael Arrington, someone who writes for a living, use the
word "literally" to mean "figuratively", my eyes literally exploded with
figurative rage."

Also, in case anyone needs a memorable explanation of when not to say
"literally", consider:
<http://www.craigslist.org/about/best/van/144733448.html>

~~~
gruseom
Heh, that's good. What other words mean both X and the exact opposite of X?

~~~
byrneseyeview
We have formed an oversight committee to avoid repeating that egregious
oversight.

Edit: Here's a collection! <http://www-
personal.umich.edu/~cellis/antagonym.html>

~~~
aston
Unlike most antagonyms, "literally" only took on its opposite meaning when it
was used hyperbolically--that is, when it was meant to be interpreted
ironically/sarcastically. I guess now we've given up on the distinction,
though.

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fallentimes
Can Techcrunch wait until something actually happens before writing about the
same thing for the 14th time?

~~~
astine
What are you talking about? This was news on NPR this morning. They've already
expressed the new terms.

~~~
fallentimes
That epitomizes the problem. There's been so much noise from Techcrunch about
MSFT and YHOO, it's very hard to decipher what's actually news/important.

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rbanffy
It seems Ballmer likes to play with his food.

~~~
josefresco
The correct analogy would be that Ballmer is "licking his cookie" so know one
else wants it.

And no, that was not a sexual reference, think middle school lunch room.

~~~
rbanffy
I was thinking more in the lines of killer whales playing with their prey.

------
LogicHoleFlaw
My knowledge of business at this level is incomplete. What would be the
implications of replacing Yahoo's board of directors?

~~~
gizmo
Depends on the people you appoint.

If you get a combination of technical people and business people who both want
Yahoo to thrive as an underdog all will be good. Yahoo will stay independent
and will probably do some great things in the next few years. Without Yang the
new board will have to prove itself, so you can expect the new board to spend
a lot of money in research/acquisitions. When a company is fighting for its
survival you can expect great things to happen. So with a new board Yahoo will
have to innovate and surprise us all.

If you appoint people for one purpose (selling the company), then that's
exactly what will happen. Because the purpose of a merger between Microsoft
and Yahoo is (partially) an "increase in operational efficiency" Ballmer will
definitely get rid of thousands of jobs (= save money). Therefore, before the
merger happens a lot of good people will leave (for google) and a lot of
mediocre people don't want to wait for the axe to fall. The stock would
normally crash as a result, but the promise of MS buying Yahoo will keep it
reasonably healthy. (If MS walks away after the board is changed Yahoo is
fucked.) So MS buys Yahoo, the shareholders and board of directors get their
money and wall street is happy. Ballmer will start handing out pink slips and
save billions. MS shareholders will be very happy.

So in the short term the MS-Yahoo deal works out for everybody. MS and Yahoo
shareholders get more money and a lot of waste is cut out of Yahoo. Okay, it
doesn't work out for the employees who become redundant, but that's to be
expected. On the long term it doesn't look so great. The merger will make it
even harder for MS to adapt to changes as it becomes even bigger, and
squabbles within MS will make it harder to get anything done for everybody.

The entire deal is basically a short-term versus long-term issue. Either you
want to cash out now (and sell Yahoo) or you want to wait it out and hope
things get better. Yang, as one of the founders, thinks long term and stays
positive. Investors and shareholders, by their very nature, think short term.
Hence the conflict.

~~~
rw
"Okay, it doesn't work out for the employees who become redundant, but that's
to be expected." This is actually, you know, a really bad thing for them. They
have families and no trust funds.

~~~
gizmo
I'm not trivializing the matter. Nobody likes to fire and nobody likes to get
fired. But a lot of people are let go after every merger - that's just how it
works. So if a merger makes sense financially then you have no choice.

~~~
raganwald
There's a very specific fiduciary responsibility with public companies. There
are widows with some of their retirement savings invested in tech stocks like
YHOO, and the board must act in their interests.

I suggest that with YC-scale businesses there's a very different dynamic.
Imagine starting such a thing, building it to 100+ employees, and then selling
out in such a way that 75+ of your folks are let go by the buying company that
just wanted the technology and/or customers.

When you go to start your next venture, the VCs will ask how the last one
went, and when they hear about the payday for shareholders, they will shower
you with money. Everyone likes a winner.

But when you go to recruit talent, and they ask you how the last one went,
what do you plan to tell them?

~~~
gizmo
You're not making much sense. There's no secret. Nobody's hiding anything. So
I would tell them the truth. What could I possibly achieve by lying in the
scenario you describe?

You're suggesting that people would rather work for somebody with no
experience and no money than for somebody who has already built and sold a
successful venture?

I don't get it.

~~~
raganwald
I'm saying that people would rather work for someone who has experience
building and selling a successful venture where the employees felt they also
gained, vs. working for someone with experience building and selling a venture
where the employees were laid off and received little for their trouble.

Case in point: Some time ago up here in Toronto there was a venture founded by
someone who had built a company with much talk of going public but one thing
led to another and he sold it to a large US conglomerate. Due to the way the
terms worked, most of the people with stock options ended up with a few
hundred dollars.

As you might expect, the operations were slowly wound down and everything
moved to the buyer's head offices state side. People found other work.

One tech manager put it this way: "I got big screen TV money out of the deal,
but I wanted house money or at least car money."

He told me this while explaining why he was avoiding calls from head hunters
staffing up the founder's new company.

The net-net of what I'm trying to say is that if you are running a smaller
start-up, and you might want to do it again, consider making sure that the
employees perceive they benefit from the deal and not just the major
shareholders.

You make the call.

------
TweedHeads
I still can't believe how ballmer is the head of microsoft, all he brings to
the company is embarrassment and failure, not a single victory in a decade.

Any resemblance to our president is just a mere coincidence.

~~~
gizmo
Ballmer and gates are both extremes. Gates always wasted heaps of money,
starting up projects and killing them again... have different groups build the
same software (then kill the least successful project)... buy companies on a
whim, and so on. Being wasteful is not the end of the world if your revenue
grows with 500% each year, but it doesn't make the shareholders happy.

So with this tactic Microsoft started to dominate every field in software. At
that point the waste started to add up so Gates got Ballmer to clean it up.
And when Ballmer became CEO he did cut the waste and made MS tremendously
profitable. A great accomplishment. However, now it's time (and has been for a
few years) for somebody technical to take charge again.

~~~
jimbokun
Alternatively, perhaps it is time to treat MSFT like the dividend stock that
it is, acknowledge that it has probably peaked as an industry force, and
channel the slowly ebbing value accumulated into shares of MSFT into grand
philanthropic ventures.

I think Bill chose this route.

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giles_bowkett
I didn't pollute my mind by reading this - I only saw it because of some bug
in my TechCrunch-links-screening script - but what on earth could make
somebody think that Microsoft crossing the line could be news? That's all they
ever do.

