- By Peter Varhol
Now that Microsoft has given
on a recalcitrant Yahoo, it's time to ponder who will be next in the
Microsoft acquisition sights. Several stories on RedmondReport.com
-- such as this
from CNN -- provide some speculations or advice on what Microsoft should
I'd like to think I'm honest enough to admit that I have no clue what path
Microsoft should follow. Having had a front-row seat at several mergers only
to see them fail, I had my doubts as to the proposed acquisition. But sometimes,
when you can't catch up to the market leader no matter how much money you throw
at the problem, you have to acquire the technology to leapfrog your own internal
efforts. But that only works if you know how to use the technology you've bought.
So what do you think Microsoft should do now? Give me your thoughts at [email protected].
Amazon Sues New York Over Taxes
The ongoing battle between Internet sellers and state revenue coffers was jacked
up a notch recently with a lawsuit
filed by Amazon.com against the state of New York.
This suit is in response to a recently passed New York law that requires a
retailer with an agent in the state to collect sales tax from buyers in that
state. Most states' laws require a physical retail presence in the state to
require the retailer to collect sales tax.
In this case, New York has specifically written the law to include affiliated
agents of Amazon, those who have links to Amazon on their own Web site, and
receive a few cents for referrals. There are thousands of such agents across
the country (I was one in a previous role, simply because my Web portal included
links to Amazon), making it virtually impossible for Amazon to avoid becoming
a tax collector.
I appreciate the need for governments to respond to the lost tax revenue caused
by Internet retailing. However, actions such as this simply represent old and
stale thinking on the part of those governments. They still have to deliver
essential services to their citizens, but is this the best they can do?
What's your call on Amazon affiliates and New York? I hear you loud and clear
at [email protected].
Sun Microsystems Deals with Loss, Layoffs
I don't normally write about a company's financial results because they bear
little on the technology, but the continued deterioration at Sun Microsystems
begs to be mentioned because it says something about technology trends. The
company's latest quarterly figures show a $34
million loss on sales that were down slightly from a year ago.
During the dotcom boom, Sun positioned itself as the irreplaceable dot. Its
proprietary architectures offered outstanding performance and reliability, and
few cared that they had to pay a hefty price for those characteristics.
After the dotcom bust, the market for SPARC servers went south so fast that
the company laid off tens of thousands of workers (I think the final number
was around 40,000), and built a new hardware business -- selling x86 servers.
Currently, the typically low-margin x86 systems make up half of the company's
server shipments. After a long (three-year) period of losses, it had five consecutive
quarters of profit, only to blindside industry watchers with the latest quarter
What do you think? Brief hiccup or technology roadkill? Tell me at [email protected].
Mailbag: Life After Yahoo
yesterday about the failed Microsoft-Yahoo deal, saying that Microsoft didn't
need Yahoo anyway -- and certainly not at $48 billion. Most of you agreed:
I can't tell you where you are wrong, because you are absolutely right.
"To invent the future, not to buy the past." You should copyright
that. Though as you have pointed out many times, Microsoft is not very inventive.
I couldn't agree more with your assessment. I believe that Microsoft needs
to invest that $48 billion and expand the technology forefront to surpass
Google. There is definitely sufficient intellectual capital there and with
Ray Ozzie as chief architect, they are more than capable of pushing the envelope.
Definitely a better ROI!
Thank the Lord for miracles. Steve Ballmer and company can easily out-build
anything Yahoo can do and probably make more money doing it. I hope that this
will once and for all make Microsoft understand that you can't always buy
what you want; sometimes you just might find you have what you need (to paraphrase
a classic Stones tune).
I happen to agree with you. Should Microsoft buy that dog Yahoo, I personally
would pay no more than $25 to $30 billion. Yahoo might -- and it's only a
might -- add to Live Search, which I use exclusively. Live Search does everything
for me that either Google or Yahoo can. Ask.com might be a much better fit
and could probably be bought for $12 to $15 billion. It has a reasonable amount
of search capabilities and would complement Live Search quite well. Microsoft
can and should expand Live Search. I firmly believe it is quite a viable alternative
Now, what Ballmer is going to do -- and if he gets reigned in by Bill Gates,
a real possibility and one that Gates should consider -- is the real question.
As a stakeholder in Microsoft, I have e-mailed Ballmer, Gates and the rest
of the board expressing my disinterest in the acquisition of Yahoo. I've also
let them know my disgust. It's just not worth the money. The only thing worth
anything would be the development team at Yahoo. They would be an excellent
addition to Microsoft's present development team. Other than those people,
and if they stayed and worked for Microsoft, Yahoo is worth less than nothing.
I would not by Yahoo. In fact, I wouldn't touch that company with a 10-foot
I agree with you that the money is better spent on inventing the future
but you didn't address the value that Microsoft placed on all the traffic
that Yahoo commands. That was the true value that Ballmer coveted.
Microsoft wouldn't have increased its offer to $48 billion unless it thought
it would swing things its way. When Yahoo said "No," I think Microsoft
realized it would either lose its case or else spend so much to win that it
would lose money in the process.
As far as Microsoft using its billions to invent the future, I think
it should give us software that is not full of holes and something we want,
instead of trying to shove Vista down our throats. Nobody that I know wanted
it and my cousin has had nothing but problems with it. If you needed another
car but the only one that was available was worse than the one you had, would
Unless Bill Gates is still the man behind Microsoft and he closed the
door on this deal, Microsoft and Steve Ballmer will have a hard enough time
in keeping up with the present. Steve is not as clairvoyant as Bill is. Steve
gave up on Yahoo. Bill Gates would have cordially received Yahoo and found
a futuristic and/or emerging technology to create a win-win for both companies.
Can you say "Zune II" or "Yahoo for robotics and/or immersion"?
Maybe even "Yahoo Box" because Xbox is becoming old technology already.
If any of these ideas become reality, I want residuals from their success!
Tell us what you think! Leave a comment below or send an e-mail to [email protected].
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