Yahoo and AOL Talk Turkey

Yes, America Online is still around. Its signature dial-up access business continues to shrink faster than house prices, but over the last several years it has developed a robust advertising business surrounding its surprisingly compelling content.

Now Yahoo, desperately seeking an alternative to being acquired by Microsoft, is talking about combining with AOL. The deal would involve Time Warner, AOL's parent, taking a significant stake in Yahoo.

I can't claim to know the details, and I'm certainly not a business wiz, but on the surface this sounds like a bad idea. Neither business is doing particularly well, and combining them won't fix this problem. It sounds more like Yahoo would strongly prefer to take any alternative that doesn't say "Microsoft." Is this a viable strategy? Send your thoughts to pvarhol@redmondmag.com.

Blockbuster Tries New Market
Movie rental service Blockbuster surprised many of us by making an offer of $1.3 billion for electronics retailer Circuit City.

What does Blockbuster want with Circuit City? Apparently, it would like to expand the market for movie rentals by embedding those rentals into your TV as well as other electronic devices.

I subscribe to Blockbuster Total Access, which lets me have both mailed DVDs as well as store-rented ones. But I'm not yet sure whether I want them embedded in my TV. How about you? Are you looking forward to this brave new world? Tell me at pvarhol@redmondmag.com.

Salesforce.com and Google Team Up
Salesforce.com has announced that it has integrated Google Apps' e-mail, instant messaging, calendaring and spreadsheet applications with its traditional hosted CRM service.

Salesforce.com customers can use the Google on-demand tools to improve collaboration and productivity in managing and tracking sales leads. In addition to working with sales contacts, Google Apps lets Salesforce.com users write memos and sales proposals, coordinate them with other Salesforce.com users, and schedule group meetings with potential customers.

Have you used Google Apps yet? What's your impression? Give me your feedback at pvarhol@redmondmag.com.

Mailbag: The Rise and Fall of Windows OS?
Yesterday, Doug wrote about Gartner's latest prediction: Windows will inevitably collapse "due to its sheer size" and the only thing that can save it is virtualization. Doug's not buying the doom and gloom -- and neither are readers:

I think Gartner is going to collapse from the sheer weight of its intellect and expensive membership fees. I remember hearing about the demise of Microsoft during the Windows 2 timeframe, too. We survived Windows ME. We are still here.
-Anonymous

You're not wrong. Gartner, which I enjoy reading, has merely been caught with egg on its face. Though I'm ticked off about the bloated mess of Vista, and will likely not move until Windows 7 hits the shelves, I still lie down at night and thank God that Microsoft exists. Without Big Bill and his rowdy herd of bandit code writers, I wouldn't be raking in the big bucks that I do as a consultant. So with a big debt of gratitude, I say this: Microsoft has not only seen the need for virtualization, but it's already become a major player.

By the looks of our early Server 2008 deployments, we're loving Hyper-V and all the virtual madness it involves. Now, if I could only do something with that ugly GUI! (I used to be anti-virtual...that is, until I saw and used Server 2008.)
-Nick

Aren't those the same bunch of idiots that thought the world was going to end back in 2000? Easy work if you can find it. They've been predicting the widespread implementation of the thin client now for at least 10 years; it's always the "product of tomorrow."
-Anonymous

Some of our departments here at USC have subscriptions to Gartner's IT predictions, so I occasionally look and see what it is saying. I have rarely seen it predict ANYTHING correctly. It seems like it has ulterior motives with ALL of its ruminations, something along the lines of, "IT is falling into ruin." Rarely do you see a positive prediction from it about anything. I gave up watching its missives some time ago.

We use Microsoft's software here quite successfully. We have a mix of staff, students and faculty that are a very demanding audience. Yet, except for the occasional headache -- you are bound to have some! -- we keep things operating pretty smoothly.
-Bill

The bigger question is: Is the Gartner group any different than a politician? Or a college professor that has never worked in the field that they teach?

I've been reading about constant Vista complaints, and how MS is really bad at this and that. Some are really good articles and some make my blood boil. I don't agree with everything Microsoft does -- I don't think any of us does -- but I'm sick and tired of hearing all the "study groups" who denounce a product as soon as it's released before giving it some time. Maybe someone should rate the raters?
-Don

Gartner will always have the "not ready for the enterprise" theme for Windows. It's been on this message for the last 15 years or so. Main reasons: It caters mostly to CIOs in large, established shops; the majority of analysts live in towns where IBM execs and management live; IBM is only a 20- or 30-minute drive from Gartner; it's been a Oracle shop (internal apps) for 20 years; it was a Novell and Notes shop (maybe still are); its position is always that Microsoft needs to reach some mystical goal; and it does all this based on what it hears from clients or vendor briefings, never "we brought it into our labs and we found..." I think a great bit of research would be to take analyst firms' overall themes and rate the accuracy of predictions over time.

The virtualized client is the long-held fairy tale of the Unix and mainframe crowd because they're generally not in touch with users and their productivity requirements. But I agree with you that it isn't going to happen.
-Anonymous

I do not see Windows crashing or dying any time soon. However, Microsoft has nowhere to go but down. It's just a matter of time before the other competing OSes step up to the plate corporate-wise and gradually chip away at Microsoft's dominance. I see Linux companies, especially enterprise favorites like Red Hat and Novell, having the most to gain here. Apple likes being second banana too much to compete in the enterprise.
-Sam

It's about marketing -- two guys who leverage Gartner's name to promote the "anything but Microsoft" mantra. My gut feeling is that if MS continues to sit on its rear end and not respond to Apple's marketing campaign, then you can expect to see the Mac (and others) continue to gain market share.
-Richard

Tell us what you think! Leave a comment below or send an e-mail to pvarhol@redmondmag.com.

About the Author

Peter Varhol is the executive editor, reviews of Redmond magazine and has more than 20 years of experience as a software developer, software product manager and technology writer. He has graduate degrees in computer science and mathematics, and has taught both subjects at the university level.

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