Are Microsoft and Yahoo Still Dancing?

I would have thought not, but there are indications that there are still discussions -- and perhaps serious intent. The latest move by Yahoo was to delay its annual shareholders' meeting until the end of July (still without a set date), which is the latest it can hold the meeting and still be in compliance with SEC requirements.

Further, Yahoo Director Edward Kozel has announced his resignation from the board. While the official word is that he had planned to leave before Microsoft's offer, there's some suspicion that there was disagreement among board members on the Microsoft deal.

Is there still a chance for an acquisition here? Give me your opinion at pvarhol@redmondmag.com.

More Internet Commerce Lawsuits on the Way
We reported a few weeks ago that New York state was suing Amazon.com to collect sales tax, based on a new law that redefined an in-state presence to include members of the Amazon Affiliate program.

Now the need to recoup lost tax revenue seems to be spreading. The city of Chicago is suing eBay and its subsidiary StubHub for not collecting the city amusement tax on ticket sales. Apparently, StubHub has a physical presence in the city, but eBay doesn't. The article goes on to report that Texas is considering suing Amazon based on the same rationale used by New York.

Is the era of a largely tax-free Web over? Granted, there are many large retailers that collect sales taxes for Internet sales, but they tend to have a physical presence in those states, so law and precedence are on the side of government. Incidentally, I live in a state that doesn't have a general sales tax, which makes things more straightforward.

How is this growing battle going to end? Send me your thoughts to pvarhol@redmondmag.com.

Microsoft To Pay To Search
Microsoft may have found a way to convince people to use its search engine, and it has nothing to do with technology. Instead, the company is gearing up to provide rebates to users who purchase items found using its search technology.

Specifically, shoppers who sign up for a Microsoft Live account and buy items found using Microsoft's Live Search cash back site will receive a small percentage of the purchase price deposited into their online account.

Granted, it's not a lot of money, and it's not a lot different than promotions from credit cards or even coupons, but it's surprising to see Microsoft doing it. What's your take? Desperation or innovation? Let me know at pvarhol@redmondmag.com.

Mailbag: Dear Bill and Steve...
Last week, a student protestor tossed a couple of eggs at Steve Ballmer during a talk. Lafe wanted a more diplomatic approach: What would you say to either Bill Gates or Steve Ballmer if you had the chance? Here are some of your responses:

If I could say anything to Steve or Bill, it would be this: Why have you allowed Microsoft to become the target of constant negative press and public commentary, most of it unwarranted? You have allowed Apple and other companies to make Microsoft into a laughingstock. What do you intend to do to remedy the public perception of Microsoft as a monopolist purveyor of poor quality, annoying and overpriced products?
-Dave

As I see it, the "egg-toss dilemma" stems from the perception that Microsoft is charging everyone BUT students too much. As a Microsoft partner, I also find it hard to sell the product to people who think it's cooler to buy it for cheaper through educational channels, even if they don't qualify.

It seems that Microsoft has a "Mexican economy mentality" about pricing. There's only the rich and the poor, and no middle-class pricing. Wouldn't it be a good thing to make the product prices a little cheaper on the high end, and a little more expensive on the low end? The Education price for Office 2007 is around $30, while the Pro version is $400 or more. If Microsoft licensing were more realistic, it might be possible to get fewer eggs in the face. Otherwise, there may be a lot more egg tossing in the future.
-Dale

I can't speak about how Microsoft treats Hungarian students, but the ultimate steal offer Microsoft made to U.S. students from last fall until the end of April for Office Ultimate is how it should be done everywhere. I was able to snap up a copy of Office Ultimate for my college student daughter at a fantastic price. Microsoft should do something similar for other countries -- and probably would if foreign software piracy wasn't the plague it has become. Compared to what the general public pays for other Microsoft products, all students (at least in the U.S.) are getting their money's worth, for sure.

As for pies and eggs and other food products, like any company, Microsoft can't please all the people, all the time. Most are just completely jealous of a super-successful company. Capitalism at its peak.
-Steve

I'm always quick to note that Microsoft routinely bullied competitors in illegal fashion, and should have been subdivided into competing corporations. But I strongly disagree with crude food-hurling protests. First, they are rude and crude and violate norms of civilized behavior. Second, they deflect attention away from both the substantial good and substantial evil that Microsoft has done.

It's my personal view that over the long run, people are reluctant to spend more than about 50 to 80 percent of a system's hardware costs on software for it. With hardware costs dropping steadily, that has to put pressure on overpriced Microsoft cash cows such as Office and Windows. A more effective protester would have given away free OpenOffice.org CDs while politely asking how Ballmer could justify the price of Office.
-Dave

One of Microsoft's biggest problems vis-a-vis the consumers is its approach which says it will decide how people will work. In Office programs in particular, the defaults are aggressively set and the average user isn't able to change them. And then after people finally got used to the menus in Office 2000-2003, Microsoft puts out Office 2007 and changes everything.

Now, was it really necessary to do that along with the file format changes? No, it is just bullying, which continues into the marketplace. We have not been able to purchase Office 2003 for several months already here in Israel, and the only alternative is OpenOffice (about which I don't complain). I don't know when XP will disappear from the market, but I am not looking forward to that day.
-Yossi

I manage a small IT department with various critical systems installed on both an IBM midrange and Microsoft network servers. The IBM system still runs a few programs originally written for an IBM System III, migrated to a System 36, AS/400 (CISC and RISC) and the I/5. The CISC to RISC conversion required a recompile, automatically invoked by the OS the first time the program was executed. Otherwise, the programs are unchanged. Meanwhile, we can't get a simple label program written in (MS) Visual Basic 6 that accesses the (MS) SQL database to run on (MS) Vista.

I could also go on a rant about licensing for disaster recovery sites. IBM recognizes that a machine designated for DR does not need a separate OS license although it is powered up and operational at all times. In the event the primary machine goes down, the software license is (virtually) transferred to the designated DR computer and we continue to operate legally. Microsoft? Nope, full separate licensure for all MS products installed, the OS, Exchange, SQL. No wonder it's making a profit.
-Virgil

And while most of you don't seem to think Google's online health records service is a good idea, here's one reader who thinks it's a step in the right direction:

I think Google Health is a wonderful idea that needs to be executed very carefully. I am glad there are innovative companies like Google out their that are working to improve a much-maligned health care system.
-Kevin

Got something to add? Let us have it! 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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