
What Could You Buy for $8.5 Billion? - lotusleaf1987
http://daringfireball.net/linked/2011/05/11/apple-2004
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raganwald
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?

~~~
pragmatic
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...](http://en.wikipedia.org/wiki/History_of_Apple_Inc.#Microsoft_deal)

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
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
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>

~~~
absconditus
Apple's current position is nothing like Apple's position then.

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pstack
For 8.5 billion, you could hire a couple dozen of the highest class escorts
forever and travel the world in a super-yacht with them for sixty years.

Or you could pay a ton of people that you hate the most a dollar per hit to
punch themselves in the face for a year straight.

Or you could build your own Skype service from scratch and have about
$8,499,500,000 left over to maintain and market it.

~~~
meterplech
Yeah, but how much would you have to spend to get 500 million users, many of
which you already have credit card information for? Not saying this
acquisition was necessarily worth the cost at all- but it wasn't just about
the technology.

~~~
guygurari
Pay each user who signs up and uses your service $10. You'd still have $3.5
billion in change.

~~~
incomethax
If only user acquisition costs were that low...

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PetrolMan
Am I the only one that can't read a daringfireball post without cringing?

Feels like a cultist's blog.

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code_duck
This is daringfireball? Well, you could buy Apple stock, iPads, iPods,
MacBooks, movies and songs on iTunes, AppleCare packages, Mac Pros, iMacs, Mac
accessories, and iOS apps. Nothing else is worth buying.

Oh, oops. Read the 'article'. My joke is more accurate than I thought.

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awa
Ooh.. I can play this game too. I guess Apple/Google could have bought
Facebook for a few million dollars in 2004.

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ChuckMcM
Its fun to read these sorts of things, back in the day when I was at Sun and
Sun had taken a billion dollars of VAX business away from DEC there was a
similar article about what DEC could have bought with that missing billion
dollars in revenue.

A hallmark of a successful business is that it generates enough cash that you
can step into adjacent markets. The down side is the risk to your focus if the
adjacent market it too off axis.

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smackfu
For perspective and comparison, MSFT paid a $32 billion dividend to
shareholders in 2004. With their cash on hand, they could have bought 4 AAPLs.
They currently pay out around $5-6 billion in dividends per year. AAPL pays
out $0.

[http://luhman.org/blog/2004/07/23/dividend-capture-and-
micro...](http://luhman.org/blog/2004/07/23/dividend-capture-and-microsofts-
msft-one-time-dividend-3-share)

~~~
loumf
Paying a dividend is what a company does if it thinks it cannot invest the
money better than its shareholders could.

Apple thinks it can make good use of billions of dollars and Microsoft thinks
you can do better with the dividend.

~~~
smackfu
It doesn't seem like Apple really has a plan for it's pile of cash. They just
don't want to pay a dividend and they don't want to buy back stock and they
don't want to acquire much so it just keeps building up.

~~~
loumf
They claim to be making strategic purchases in bulk of some component (rumored
to be displays) in order to get low prices and crowd others out.

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kmfrk
It's a weird thought experiment; $7.5B adjusted for inflation from 2004 to
today would be ~$8.9B. (18.3% inflation.)[1]

By this logic, Gruber would still be short of money.

[1]: <http://www.usinflationcalculator.com> (or any other inflation
calculator).

~~~
bostonpete
Yeah, it's only 13.3% growth over 7 years, which ends up being ~1.8% growth in
market share per year. Seems pretty small considering their success in recent
years...

Edit: OK, I'm a dumbass -- I misunderstood the comment and didn't realize
there was a link to click through to the chart there.

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jessedhillon
Entire text of TFA follows:

\--START--

<http://ycharts.com/companies/AAPL/market_cap>

For just $7.5 billion, you could have bought Apple — in January 2004. That
leaves $1 billion to create your time machine.

~~~
recoiledsnake
That deal would have had a snowball's chance in hell of getting the regulatory
approval in US & EU.

~~~
jjcm
I dunno, after seeing the FCC commissioner get hired by Comcast, it may very
well be Dante's hell.

~~~
michaeldhopkins
If this were Dante's hell, ex-Commissioner Baker would either be boiling in
pitch, burned alive or frozen in Cocytus.

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rudiger
In 1997, Microsoft rescued Apple with a $150 million investment just so that
Apple could survive as a viable competitor.

<http://www.apple.com/ca/press/1997/08/AppleMicrosoft.html>

~~~
j79
The problem with the "$150 million investment saving Apple" argument is that
Apple had $1.2 billion cash on hand.

Personally, I think it was Microsoft's commitment to keep Office for Mac (as
well as building/bundling IE for Mac - which at the time, was a damn good
browser!) that "rescued" Apple to a certain degree (it definitely made it a
viable machine for the education market!)

Honestly though, I think after Steve Jobs returned and killed off the clones
(and released the new iMac), Apple would have succeeded (or at least, not
"died") even without Microsoft's investment --- mostly due to how loyal the
users are. No clue how successful they would have been though, without
IE/Office (I doubt MS would have killed Office though - considering it was
still generating cash for them...)

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pchristensen
Spoiler alert - Apple's market cap was $7.5 billion 2004.

~~~
dstein
Except if Microsoft had bought it, it would not be worth even that much today.

~~~
orijing
I wonder if Skype acquisition will follow the same fate

~~~
meroliph
The same assumed fate?

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ikono
People here need to lighten up. It was a joke...

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rokhayakebe
Would it be smarter to go the future and come back to buy stocks from the next
Apple-Google-Facebook, or go to the past and buy early Apple stock?

~~~
kenjackson
If I have a time machine I hope I'm doing a bit more than buying stock in tech
companies.

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keefe
a bunch of companies working on life extension

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recoiledsnake
You know what you could buy for $1 ten days ago? The winning lottery ticket
for one million dollars in yesterday's draw.

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bigwally
Skype.

:)

