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| Friday, 25 April 2008 | |
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Aren’t we all just a bit too old to be playing these games of cowboys and Indians? Ask the gerbil.
Somebody told me just the other day (it was Bryan Ferry) that Bill Gates was a gerbil. This was quite upsetting as I have a sneaking affection for gerbils. And Bill Gates, who with his wife Melissa has given squillions of dollars to the poor through their eponymous Foundation, is a thoroughly decent chap. Gates is a 21st century hero whose little legs run the wheel of the information economy, if that’s not stretching the gerbil metaphor, or indeed the little legs of Bill Gates, too far. Steve Ballmer, who assumed the position at Microsoft when Bill went off to perform Good Works® and conquer the universe®, plays hardball. Such is his dysfunctional approach when compared to that of Gates that he has managed to turn a quasi-ogreish near-monopoly into an outright ogreish one that seeks to flaunt and expand its monopoly at every turn, rather than open its secret wares to competitors. Nobody ever much liked Microsoft; everyone hates them now. Steve Ballmer is not a gerbil as he is more rat-like. That’s the key. Microsoft has seen the entrails of its code dragged through the mud by US and European regulators. It wants to be loved. It wants to fill its cheeks with goodwill and appear less rodentine. Ballmer can’t do that. He’s the keeper of the established faith; Gates was a prophet. These days, the Beast of Redmond has gone down the route followed by Oracle and Cisco: swallow your own incompetence and compensate by swallowing the competences that you do not possess and cannot generate. Growth through acquisition. This ‘if you can’t beat them, buy them’ approach is almost OK: but why put Yahoo! into that folder of acquisitions? Two big problems here. One for each cheek of the philanthropic gerbil, wherever he may be. Fossil Yahoo! Is to search engineering what Pompeii is to town planning. Everyone uses Google. Goodness me, as part of its anti-Beast survival plan, even Yahoo! will use Google (to supply some much-needed advertising). So why buy a pup? Maybe it sounds defiant in Ballmer’s priapic world. Ho-hum. That’s for Ballmer, his cohorts and his shareholders to ponder. Secondly and damningly is the question of why Microsoft, which arguably has the largest R&D budget in the world, cannot create its own search engine. At each turn, stretching back more than a decade, you begin to form the impression that even Microsoft does not understand or can’t kindle a naked flame to light up what Microsoft actually does or how it does it. The legendary puissance of Microsoft has atrophied. Microsoft may pay as much as US$44bn to acquire Yahoo! For that sort of money, you’d be tempted to do it yourself. If you could. The Beast can’t. Microsoft should be able to see this coming. After all, its hegemony is based on taking the value out of PCs and devising an operating system that confounded IBM. The PCs are now made in China; IBM is a service shell; Microsoft is stubbornly wedded to its strength in the OS market. Chinks (excuse the pun) are to be found everywhere in its armour: a fast-rising Linux, a regulatory stranglehold, a lack of search capability, and an all-mouth no-trousers approach to the mobile world. Even if the Beast snares Yahoo!, it will be running into exactly the same problem it encountered with browsers. The only equivalence is that where IE was a pretty crap browser, Yahoo! is a pretty crap search engine. Microsoft can’t help but build stupid impediments into its proprietary offerings which, often inadvertently rather than deliberately, render them off limits to open source developers. This may answer the ‘secondly but damningly’ conundrum posed four paragraphs above. The ‘talent’ no longer sees Microsoft as a pinnacle; it’s just a pockmark on an otherwise respectable CV. Guns a-blazing From which scabrous talk, we return to Ballmer. Gun pointed firmly at foot, here’s what he said just last week at the... wait for it, wait for it… Microsoft 2008 Most Valuable Professional (‘MVP’) Summit (sic): “It is my honor and privilege to have the chance to be here with you today. I was sitting backstage thinking, gee, wasn't I just here a year ago? And somebody said to me, no, Steve. I think that would have been Toby. You haven't been here for a few years. And I thought, heavens forbid, that isn't true. This is my favorite speech every year. Toby said, is that really true, Steve? And I said, "MVP, baby, MVPs, how can it not be my favorite.?” So it is truly an honor and privilege to have a chance to be here with you today. I expect kind of a little bit more wild and wooly, rocking and a reeling kind of a discussion than I do with my average customer group. Everybody sits quietly. I don't think we're going to quite see that out of this audience, and I'm sure you're going to push, push, push, push, and we count on you for that. Ray talked about it. Toby, I'm sure, half the Western World. But the work that you guys do, not only helping our customers, but really helping give us the right kind of a kick in the backside when we need it to really be on the leading edge of how people are using these products, talking to us about it, telling us what we can do to make those better experiences is absolutely, absolutely invaluable. So I say thank you. I say I'm looking forward to it, and I'll say I'd better get to getting or I won't have enough time for Q&A. So with that, let me just give you one final thanks. We really appreciate everything you do for us. (Cheers and applause.)” Eat my shorts That’s unedited and oddly hilarious. Ballmer is not a gerbil, however. Here’s his ultimatum (it’s a gem) to Yahoo! from 05 April: “While there has been some limited interaction between management of our two companies, there has been no meaningful negotiation to conclude an agreement. We understand that you have been meeting to consider and assess your alternatives, including alternative transactions with others in the industry, but we’ve seen no indication that you have authorized Yahoo! management to negotiate with Microsoft. This is despite the fact that our proposal is the only alternative put forward that offers your shareholders full and fair value for their shares, gives every shareholder a vote on the future of the company, and enhances choice for content creators, advertisers, and consumers.” “During these two months of inactivity, the Internet has continued to march on, while the public equity markets and overall economic conditions have weakened considerably, both in general and for other Internet-focused companies in particular. At the same time, public indicators suggest that Yahoo!’s search and page view shares have declined. Finally, you have adopted new plans at the company that have made any change of control more costly.” “By any fair measure, the large premium we offered in January is even more significant today. We believe that the majority of your shareholders share this assessment, even after reviewing your public disclosures relating to your future prospects.” Yes Steve, come in for a cup of tea and a cosy chat. Ever the charmer, Ballmer concludes: “It is unfortunate that by choosing not to enter into substantive negotiations with us, you have failed to give due consideration to a transaction that has tremendous benefits for Yahoo!’s shareholders and employees. We think it is critically important not to let this window of opportunity pass.” Big bad Ballmer the charmer has given Yahoo! until tomorrow to accede to his demands. Until now, Yahoo!’s management has done a decent impression of the chief prefect in a headless poultry factory: pecking away at Google, AOL, Murdoch, etc and otherwise, as Ballmer the charmer points out, ignoring the Beast. Tomorrow? It’s not the beginning of the endgame and it is probably not even the end of the beginning-game. It will, in all likelihood, be a game. As an aged relative once said to me, “games are not the same without a gerbil, Jim.” Until now, I never quite understood what he meant. Jim Chalmers |
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