Microsoft Corp. is getting ready to take its bid for Yahoo right to the Web portal's shareholders, even as analysts wait for a higher offer.
Separately, Yahoo Inc. adopted new severance packages that protect employees in the event of a Microsoft takeover.
Microsoft has hired proxy solicitation group Innisfree M&A Inc. to help oust Yahoo's 10-member board, all of whom are up for re-election this year.
A source close to the deal who is not authorized to speak publicly about it said Tuesday that Microsoft could spend $20 million to $30 million on that effort.
That's much less than the $1.4 billion each $1 uptick in Microsoft's bid would cost. Microsoft's offer two weeks ago was originally worth about $44.6 billion, or $31 a share. Based on Microsoft's closing share price Tuesday, the offer is now worth about $40 billion.
The Redmond, Wash.-based software maker's board plans to authorize a proxy battle this week, according to The New York Times DealBook blog. It has until March 14 to nominate a slate of directors for Yahoo. Microsoft and its advisers declined to comment.
Election results would be announced at Yahoo's annual meeting. Last year's was held in June.
Microsoft also may simultaneously circumvent Sunnyvale, Calif.-based Yahoo's management and ask shareholders to sell their stock to Microsoft directly.
So far, Microsoft has given no signs it will raise its bid, even though a person familiar with earlier talks between the two companies said Microsoft was willing to pay at least $40 per share for Yahoo a year ago. That person spoke on condition of anonymity because the offer was never made public.
In an interview with The Associated Press Monday, Microsoft Chairman Bill Gates said the software maker was not talking to Yahoo about raising its bid.
Analysts, however, still believe there's wiggle room.
"I don't think what they're saying now precludes" a higher offer, said Sanford C. Bernstein & Co. analyst Charles DiBona.
DiBona also said he thinks Microsoft would prefer not to go hostile but will if no progress has been made by the March deadline.
Yahoo reiterated Tuesday that its board is "carefully and thoroughly evaluating all of the company's strategic alternatives."
The Web portal and search company's new severance plans — to take effect if Microsoft succeeds in its takeover bid — cover Yahoo's top executives and all full-time employees. The plans are designed to keep workers on board even if the company changes hands. They also could make it harder for Microsoft to move Yahoo staff to Redmond and raise the overall cost of integrating the two companies.
In an e-mail to employees last Friday, Yahoo Chief Executive Jerry Yang wrote that the severance plans "shouldn't be construed as any indication that a change in control might or might not take place."
The company said in a Securities and Exchange Commission filing Tuesday that workers who lose their jobs without "cause" or quit "for good reason," as Yahoo defines it, would continue to receive their salary and medical benefits for four to 24 months, plus reimbursement for "outplacement services" for two years.
A Yahoo spokeswoman would not say what might constitute good reason.
Departing employees' stock options would also vest faster than scheduled under the new plans.
Microsoft has said it will offer significant retention packages to Yahoo engineers and other key employees, including some executives. The software maker has not said how many jobs could be cut if the companies combined.
Yahoo's board spurned Microsoft's bid last week, saying it "substantially undervalues" Yahoo's assets.
Microsoft fired back that its offer was "full and fair," and that it would "pursue all necessary steps" to get the deal done.
Shares of Microsoft slipped 14 cents to close at $28.17, while Yahoo's stock fell 65 cents, or 2.2 percent, to close at $29.01.
Tuesday, 19 February 2008
Microsoft readies Yahoo proxy battle
Microsoft giving away developer software
Microsoft Corp. is giving students free access to its most sophisticated tools for writing software and making media-rich Web sites, a move that intensifies its competition with Adobe Systems Inc. and could challenge open source software's popularity.
The Redmond-based software maker said late Monday it will let students download Visual Studio Professional Edition, a software development environment; Expression Studio, which includes graphic design and Web site and hybrid Web-desktop programming tools; and XNA Game Studio 2.0, a video game development program.
The company will also give away SQL Server 2005 Developer Edition and Windows Server Standard Edition.
Microsoft Chairman Bill Gates said the company's past efforts to arrange educational discounts for these programs limited the number of students who ultimately could use them. DreamSpark, as Microsoft is calling the free software offering, opens up access to many more students.
It's also good for Microsoft's business, Gates added.
"We give up some revenue, but we gain the fact that we'll get the feedback of these students, get more courses to incorporate our tools into the programs and get more startups where kids are familiar with Visual Studio, Expression Studio and SQL Server," Gates said in a phone interview.
The program, which Microsoft says will put its software and Web development tools in the hands of 1 billion students, gives momentum to an attack Microsoft launched on Adobe Systems Inc. last year with the release of Expression Studio and Silverlight, its answer to Adobe's market-leading Photoshop and Illustrator design programs and Flash, the technology behind much of the video and animation on Web pages.
"It's a brilliant strategic move on the part of Microsoft," said Chris Swenson, a software industry analyst with NPD Group. "This is one of the core audiences you have to hit if you really want to make a difference in the rich Internet application market going forward."
Handing out free copies of Expression Studio to students today increases the chance that the next big Web 2.0 craze will be designed with Microsoft's tools and accessed using the Silverlight plug-in, rather than with open source and Adobe technology.
DreamSpark could also win a generation of programmers away from open source software, which companies from small startups to Google Inc. use as an affordable, flexible alternative to software from the likes of Microsoft and database maker Oracle Inc.
Gates said students will want to try Microsoft's tools because they're more powerful than the open-source combination of Linux-based operating systems, the Apache Web server, the MySQL database and the PHP scripting language used to make complex Web sites.
But Gates said giving away Microsoft software isn't intended to turn students against open source software entirely. Rather, he hopes it will just add one more tool to their belt.
Giving away Visual Studio, meanwhile, will help ensure a steady stream of new desktop and desktop-Web hybrid applications Microsoft hopes will keep consumers hooked on Windows PCs, even as more programs migrate to the Web.
The programs are available now to more than 35 million college students in the U.S., Belgium, China, Finland, France, Germany, Spain, Sweden, Switzerland and the U.K.
DreamSpark will open to high school students around the world starting in the fall and to college students in other countries in the next year.
Microsoft said it is working with individual schools, governments and student organizations in each country on systems that confirm students are currently enrolled.
___
On the Net:
Students can see if they're eligible to download the software at: http://channel8.msdn.com
Monday, 18 February 2008
Google Earth vs. Microsoft Sky…
Microsoft To Announce WorldWide Telescope On February 27
A source close to Microsoft says the company will launch new desktop software called WorldWide Telescope on February 27 at the TED Conference in Monterey, California. Our guess is that this is what Robert Scoble was talking about last week when he said he saw a new Microsoft project that brought him to tears.
The service will be accessed through a downloadable application - Windows only for now is what we hear. Users will be able to pan around the nighttime sky and zoom as far in to any one area as the data will allow. Microsoft is said to be tapping the Hubble telescope as well as ten or so earth bound telescopes around the world for data. When you find an area you like, you can switch to a number of different views, such as infrared and non-visible light.
Dan Farber posted his own educated guess that the project might be WorldWide Telescope, based on the fact that Curtis Wong and Jonathan Fay were involved, and he’s right. Last year Fay gave a presentation called “”The WorldWide Telescope, bringing the Universe to a PC near you.” In 1993, Wong started a project called “John Dobson’s Universe,” a virtual sky tour on a CD-ROM, narrated by John Dobson. The two began working together at Microsoft in 2005.
From what we hear, WorldWide Telescope will be significantly better than Google Sky, which launched last August as part of Google Earth, and the open source Stellarium (which is hugely better than Google Sky already). The key is the user interface, which is seamless as you move around the sky and zoom in and out. Much of the Photosynth technology is said to have been used for the project. And the sheer amount of data Microsoft is accessing, said to be measured in the terabits, gives that great user interface something to show off.
Time to dump Windows?
InfoWorld's "Save XP" petition asking Microsoft to keep Windows XP available indefinitely, not end most sales on June 30 as currently planned, has prompted many readers to suggest that maybe the best answer for those who don't like Vista is to switch to another operating system completely
"Don't be afraid. Just switch to Linux and become a member of a really free society," wrote Carlos Raul Gutierrez.
[ Find out the deployment secrets of early Vista adopters ]
"Windows Vista was the reason I bought a Mac mini. I didn't want my only choices to be an operating system that would soon be obsolete (XP) or one that was buggy and would break much existing hardware (Vista), and I'm not enough of a geek to use Linux (do things from the command line? Puhleeze...)," wrote "Jack."
How realistic is a switch to Linux or Apple's Mac OS X? For some users -- often technically savvy people such as engineers, consultants, designers and CTOs -- it is clearly an option that already works quite well. In the past year, running Mac OS X or Linux as your default OS has been made easier by the capability to run Windows in a virtual machine, giving you access to both Windows-only applications and Web sites that rely on Microsoft's Internet Explorer-only ActiveX technology. But in a business environment, switching to a Mac or Linux PC may not be quite as easy.
The Mac OS X optionOf the plausible alternatives to Windows, Apple's Mac OS X has the largest market share and history. InfoWorld chief technologist Tom Yager has written that the latest version of the Mac OS, Leopard (10.5), is simply the best operating system available. And Macs are indeed popping up more frequently even within IT circles -- I've seen more MacBook Pros in the hands of CTOs and IT execs at conferences in the past year more than I've seen Mac notebooks in such venues ever. Although there are no real numbers on just the business adoption of Macs, it's clear that Apple is in growth mode, gaining an increasing proportion of all new computer sales for more than a year now.
InfoWorld's Yager has chronicled the adventures of one PC user who switched to the Mac OS, showing that for an individual, the conversion was ultimately a rewarding one. The TechWeb site has also provided a good guide on how to make the switch to Mac OS X.
A key tool for any Mac OS X switcher is a virtual machine to run Windows for those apps and Web sites that require it. Both Parallels Desktop 3.0 and EMC VMware's Fusion software will do the trick, as InfoWorld's comparative review has shown.
Although Macs are compatible with most typical hardware, such as monitors and drives, fitting a Mac into an enterprise's management systems and ERP applications can be a different story. Yager's Mac Enterprise blog and the Mac Enterprise user group both provide advice on managing Macs in a traditional IT environment.
The Linux optionThe more technically inclined may be attracted to Linux, the most popular form of desktop Unix. Linux desktops typically are challenged by limited hardware compatibility (due to lack of drivers), limited application options, and user interfaces that require active participation to get work done, which tends to keep Linux away from the general user population. But those who work with a Linux server all day may find that using it on the desktop as well actually makes their lives easier.
Just as Mac users need occasional access to Windows, so do Linux users. Because Linux distributions run on Windows-compatible hardware, it's straightforward to use desktop virtualization software, such as Parallels Workstation, Sun's (formerly Innotek's) VirtualBox, and EMC VMware's Workstation software, to provide access to both environments.
Although some enterprises have committed to wide Linux deployment -- such as automaker Peugeot Citro??n's plans to install 20,000 Novell Suse Linux desktops -- most have left Linux to the engineering and development staff.
InfoWorld Enterprise Desktop blogger Randall Kennedy argues that desktop Linux is doomed to remain a tiny niche OS, given the Linux community's lack of interest in providing a UI that regular people could use. Kennedy tried to spend a week working on nothing but the Ubuntu distribution of Linux but gave up on the fifth day.
But Kennedy's take isn't the last word on desktop Linux. Frequent InfoWorld contributor Neil McAllister put together a special report on how to move from Windows to Linux, concluding that the effort was not as hard as you might think.
Who's right? As with any platform choice, they both may be. A one-size-fits-all approach may be unrealistic. And that likely explains why many businesses will have a mix, dominated by Windows XP today (and perhaps Vista in a few years) but not exclusively tied to Microsoft's OS.
Microsoft Denies Credit to Bug-Hunter with Racy Name
When a hacker going by the name Chujwamwdupe published attack code that exploited a recently patched bug in Microsoft Office 2003 earlier this week, it looked almost as if he were publishing the software out of spite.
At the top of his submission, Chujwamwdupe wrote about an e-mail informing him that "Unfortunately, Microsoft has refused to credit you using the name you requested."
"What's wrong with 'chujwamwdupe', eh?" the hacker asked.
Well quite a lot, it turns out, if you live in Poland, where it refers explicitly to a form of sexual intercourse.
Concern About Credit
In the hacker world, where so much rides on reputation, Microsoft had been put into a tough position. The company generally goes out of its way to credit hackers who responsibly disclose software vulnerabilities, and by not crediting Chujwamwdupe, it may have put customers at risk by accelerating the release of attack code. After all, quickly releasing an exploit is the one way a hacker can back up his claim that he actually discovered the bug in question.
Even though the flaw, which lies in the Works File Converter, was patched the day before the exploit code was released, it will be months before all of Microsoft's customers install the updates. This means that Chujwamwdupe's code could be misused by criminals.
A member of Microsoft's security team flagged Chujwamwdupe's submission, a spokeswoman with Microsoft's public relations firm said in an e-mail message. "One of them happened to speak the right language and brought the issue to our attention," she said. "The finder's user name could have been perceived as offensive in another language, so we credited the vendor, VeriSign iDefense VCP, [Vulnerability Contributor Program] for reporting the issue to us responsibly."
VeriSign pays hackers like Chujwamwdupe for vulnerability information so that it can give its customers better information on the bugs when Microsoft finally patches them. And while the majority of contributors use their real names, some do use hacker pseudonyms.
Usually that's not a problem, said Matthew Richard, the director of iDefense's Rapid Response Team. "It really doesn't come across that often. There really aren't that many handles that are offensive," he said. Chujwamwdupe is "one of the very few that I've seen," he added.
3Com's TippingPoint division, which also pays hackers for vulnerability information, had to talk researcher Manuel Santamarina Suarez out of using a similarly offensive pseudonym, telling him, "we totally get your originality, but we're professionals here," said Terri Forslof, TippingPoint's manager of security research.
According to Forslof, who spent four years working for Microsoft's Security Response group, there are technical reasons why offensive terms cannot be included in the security bulletins. Such a word might cause the bulletin to be blocked by e-mail or Web-filtering software, she said, making it harder for Microsoft to communicate vital security information with its customers.
Still, things would have probably worked out better for all parties if Microsoft and VeriSign had worked out some way to credit the hacker, she said. "If Microsoft would have credited him, would he have felt the need to post that exploit code?"
"I believe that there was a communication breakdown here," she said.
Sunday, 17 February 2008
Yahoo big investors may back Microsoft
Financial risk management analysis company RiskMetrics Group found that close to 90 percent of Yahoo's institutional shareholders have a cross-holding in Microsoft, including most of the top 20 -- and generally have significantly more money invested in Microsoft.
The two companies are at a stand-off in Microsoft's $41.7 billion unsolicited bid to acquire Yahoo. Microsoft has offered to buy Yahoo for $31 a share in cash and stock, a bid which Yahoo's board rejected, saying it undervalued the company.
Microsoft countered by saying that its offer was "full and fair," but did not say what it planned to do next. Analysts expect Microsoft to sweeten its bid, possibly to $35 a share, to clinch a deal.
Yahoo shares surged on news of the bid, but Microsoft shares have fallen. Shares of Microsoft were down 11 cents to $28.39 in Friday afternoon trading on Nasdaq, down 13 percent since the offer went public.
Yahoo's stock was down 40 cents to $29.58, representing about a 2 percent premium to Microsoft's half-cash and half-stock offer, which indicates investors are expecting a higher bid.
A shareholder that owns both the target and an acquirer will be more interested in the net benefit of a deal, RiskMetrics said. Shareholders with more money invested in Microsoft than Yahoo will most likely urge Yahoo not to push its case too hard.
"They may be more concerned with whether Microsoft will get caught up in a 'deal frenzy' and suffer the 'winner's curse' by overpaying for Yahoo," RiskMetrics analysts wrote in an M&A Edge Note.
"We can expect shareholders who own both companies to pressure Yahoo directors to extract a material sweetener from Microsoft (which will help Yahoo directors save face) that isn't seen to destroy the perceived benefits of the merger, prior to ... ultimately succumbing."
Earlier this week, Yahoo's second biggest shareholder, Legg Mason (LM.N), urged Microsoft to raise its offer. In a letter to investors, Bill Miller, the star stock-picker at the U.S. asset manager, estimated that fair value for Yahoo was around $40 per share.
RiskMetrics said this was not a big surprise since Legg Mason is one of three of Yahoo's top 20 institutional shareholders with significantly more money invested in Yahoo than Microsoft.
"Don't expect to see many of the other top Yahoo shareholders following Bill Miller's lead," the report said.
Wednesday, 13 February 2008
MICROSOFT to buy DANGER INC
Danger is best known for its mobile software and services for the T-Mobile Sidekick. What would Microsoft possibly want from Danger, which has a focus that is decidedly the consumer market?
On Feb. 8, Scott Rockfeld, the group product manager for Microsoft's Mobile Communications group, and I discussed the company's emerging cell phone strategy. After years catering primarily businesses, Microsoft is shifting its cell phone focus to consumers—and furthering the blurry line between personal and professional mobile usage.
As I explained last night, Microsoft recognizes that people increasingly commingle data and behavior around cell phones, perhaps more than any other device that they use. Rockfeld spoke about a strategy where there is "one phone for your entire life."
When I think QWERTY keyboards, slider phones and thumbs in action, I think HTC for business and Sidekick for consumers. Danger will fill a Windows Mobile niche between them, with early focus primarily on consumers.
But there is something more fundamental that too many mobile manufacturers, carriers or service providers have ignored: A phone is fundamentally about communication. And who do people communicate with? D'oh, other people. Danger's services are all about communications—socializing with people most important to you.
Danger's social networking focus resonates well with communication market trends and Microsoft's larger Windows Live objectives.
Tuesday, 12 February 2008
Microsoft agrees Danger purchase
The gadget, also known as the Hiptop, has been popularised by a number of American celebrities, including socialite Paris Hilton.
Danger was co-founded in 1999 by Andy Rubin, Joe Britt and Matt Hershenson. Mr Rubin has moved on to a new job running Google's mobile venture.
Microsoft did not disclose the purchase price as it made the announcement. Hilton is among stars who have given Danger a cool cachet
Swivel screen
A statement by Microsoft highlighted the fact that it saw Danger's customer base as "young and enthusiastic, internet-savvy and socially inclined".
The statement added: "The Danger team has a deep understanding of consumers and a hold on what people want from mobility, making it an ideal group to work with in delivering connected experiences."
It will be really interesting to see how Microsoft integrates the technology, business model, and overall device cachet to a culture more at home to selling to enterprise CIOs than it is to selling rock stars
Michael GartenbergJupiter Research analystSpeaking at the Mobile World Congress in Barcelona, Robbie Bach, Microsoft's president of entertainment and devices, said: "It completes the picture for us in terms of making the transition from just being on the business side of things to being on the consumer side of things."
The SideKick allows users to instant message, talk on the phone, send e-mails and access the web, with a distinctive swivel screen that flips around 180 degrees to reveal a full keyboard.
Mr Rubin has said in interviews the company was called Danger because he had bought the danger.com domain name several years earlier. The name was a reference to a robot in the TV show Lost in Space, which continuously issued "Danger!" warnings to the cast.
Michael Gartenberg, analyst for Jupiter Research, said on his blog that news of Microsoft's acquisition was the "real excitement" of the first day of the Mobile World Congress.
He added: "The T-Mobile SideKick has had moderate success in the US markets appealing to celebrities, sports figures and of course all the demographics that look up to these folks.
"The SideKick had strong appeal as the anti-Blackberry for younger audiences and it will be really interesting to see how Microsoft integrates the technology, business model, and overall device cachet to a culture more at home to selling to enterprise CIOs than it is to selling rock stars."
Survey says: love at first ping
In the spirit of Hallmark and chocolate roses, we recently took a special interest in Valentine's worthy tidbits about how Gmail has helped spur romance -- as it did for Jordan Burleson, who told us:
"Gmail is the new Cupid. Gmail's green chat light meant 'go' for love in my life. My girlfriend and I used ... it for projects and homework at first, but then for flirting, pinning down a location for a first date, emoticon hearts and more."In other cases, email has helped maintain long distance relationships, like that of long-time Gmail user Meagan Coleman:
"My husband and I met in 2004. He's from Macedonia and I'm from the USA...Since we met, Gmail has been archiving our long-distance relationship from the beginning! It's very sweet to be able to read those messages that we wrote to each other 3 years ago."Curious about how common emailing love letters really is -- and to learn more about how people use email to communicate with friends, family, and co-workers -- we recently worked with Nielsen Online to conduct a national survey examining how people think about and use webmail.* The survey affirmed that email is an increasingly important part of our most intimate and personal interactions, and that younger people are leading the charge: they are more likely to use email for everything from sending love letters to ending relationships.Love is in the inbox
1 in 3 survey respondents noted having emailed a love letter
Young people indicated they were less averse to showing their affections over email than older adults: only 14% of 18-24 year olds considered email love letters bad behavior, compared to 43% of respondents over the age of 55
Men were more likely than women to have asked someone out via email (26% versus 16%)
While 31% of 18-24 year olds thought asking someone out on a date via email was poor form, 42% of respondents aged 55+ felt the same wayBreaking up is hard to do; some get help from email
1 in 3 male respondents considered "break-up emails" neutral to good email etiquette, whereas only 1 in 7 female respondents agreed
8% of men and 6% of women said they had broken up with someone over email Whether you're sending hearts this year or breaking them, we hope you have a happy Valentine's Day.* The online survey, commissioned by Google, was conducted by Nielsen Online from September 24th to October 15th, 2007, with a sample of 1,713 webmail users over the age of 18. "Webmail user" was defined as someone who uses AOL Mail, Gmail, Hotmail, or Yahoo! Mail
Thursday, 7 February 2008
OpenID Welcomes Microsoft, Google, Verisign and IBM
As anticipated by TechCrunch UK in early January, OpenID is welcoming some big new partners to the club - Microsoft, Google, Verisign and IBM (TechCrunch UK anticipated all but Microsoft).
Google has been dabbling with OpenID for some time with its Blogger platform (and Brad Fitzpatrick, the creator of OpenID, is now a Google employee).
Yahoo also announced support for OpenID earlier this month, which more than tripled the number of OpenID accounts to 350 million. 10,000 websites now accept OpenID accounts for login.
All of the newcomers, along with Yahoo, have joined OpenID’s corporate board and, we assume, will be making their user accounts OpenID-compatible. But it’s not clear that any of them are in a hurry to become a “relying party” (allowing users with third party OpenIDs to log in to their sites). OpenID looks like it’s going to be a winner, so big companies making their user accounts OpenID compatible is a good hedge. Everyone, of course, wants to be an ID issuer, since they get to “own” the user. Less attractive is allowing users from other sites to log into your services, so don’t expect that functionality to come for some time.
Search, Ads, Yahoo and Microsoft
While everyone comments about Microsoft's offer to buy Yahoo, I think it's interesting to look back at the struggle to stop Google's domination in search and PPC ads.
Yahoo Inc. yesterday announced plans to buy Internet advertising firm Overture Services Inc. for $1.63 billion in stock and cash in a move designed to help the online giant exploit the growing market for sponsored search results. (...)Overture, formerly known as GoTo.com, pioneered the approach of letting advertisers bid for the right to place their links alongside search terms and paying only when users click through to their Web site. Overture, based in Pasadena, Calif., claims 88,000 advertisers and licenses its commercial results to Yahoo, Microsoft's MSN.com and other Web portals. Google has copied Overture's business model and claims 100,000 advertisers. (...)Overture sells sponsored search results to other portals besides Yahoo. Microsoft Corp.'s MSN.com is one of Overture's top customers, and analysts consider it highly unlikely the Redmond, Wash., software giant will want to continue using Overture's ad network once rival Yahoo completes the takeover.
(Washington Post, July 15, 2003)
On Thursday, Microsoft CEO Steve Ballmer said he regretted not spending more on in-house search research and development in the past, but said the company has addressed the oversight and plans to unveil its own search product within the next 12 months."Not only do I think Microsoft is capable of building extraordinary search technology, I believe Microsoft is hell-bent on developing that technology in Redmond (Wash.) without a material acquisition," said Rohan. "That is the Microsoft way."
(CNet, March 26, 2004)
Rashtchy estimated that the search industry will reach nearly $7 billion in revenue by 2007, growing at a compounded rate of 35% each year. Those kinds of numbers attract a lot of attention. In 2003, Yahoo!, which was outsourcing its search to Google, wanted in on the action and paid $1.63 billion to buy Overture. Last month Yahoo! dumped Google and now exclusively uses Overture, officially declaring war. Sleeping giant Microsoft, meanwhile, was rumored to have made an unsuccessful stab at acquiring Google, and is now using its nearly infinite resources to improve it own search engine.
(Forbes, April 26, 2004)
Keyword search is the largest component of U.S. online advertising, and Google derives virtually all of its ad revenues from this category. The growth in that segment speaks for itself. Based on data from PricewaterhouseCoopers/IAB Internet Advertising Reports, the overall keyword search category generated $81 million in revenues in 2000, representing only 1% of overall online ad sales. Jump ahead to 2003, and keyword search accounted for $2.5 billion in revenues -- a hefty 35% of the total U.S. online ad-sales pie.
(BusinessWeek, June 11, 2004)
As previously reported, Microsoft's Internet group is developing a pay-per-click ad-bidding system that pairs search results with sponsored text messages from advertisers. Yahoo's Overture Services currently supplies MSN with sponsored search links, which complement MSN-sold "featured sites." (...) With the product, Microsoft will move into the mother lode of a multibillion-dollar ad business dominated by Google and Yahoo. Search-engine marketing is expected to be worth as much as $5 billion this year, and nearly $9 billion annually within four years, according to Jupiter Research. Microsoft's piece of the pie is smaller than the shares enjoyed by market leaders Yahoo and Google, and the software giant is hungry for more. Google fields 35.1 percent of the searches online, followed by Yahoo at 31.8 percent and MSN at 16 percent, according to ComScore QSearch.
(ZDNet, March 16, 2005)
Microsoft is taking on the great Google Money Machine with an inhouse answer to Google Adwords.Step forward Microsoft adCenter, launched yesterday to pump out all-paid search traffic on MSN and other Microsoft online properties in the US. Microsoft’s adCenter replaces Yahoo!'s Overture as the paid-for search engine on MSN. The only surprise is how long it took Microsoft to make the switcheroo – predicted ever since Yahoo! bought Overture in 2003 – and confirmed this time last year by Microsoft at its annual MSN Strategic Account Summit.
(The Register, May 4, 2006)
The Internet search-advertising wars are getting hotter: Vowing to catch up to industry leader Google, Yahoo Monday will demonstrate an overhauled advertising system that promises to generate higher revenue and enlist more clients.On May 4, Microsoft unveiled its own search advertising program and said it would invest up to $6 billion in a bid to catch up with Google.Yet Google still easily dominates paid search ads — those little text ads that appear near search queries. The Internet powerhouse has made several enhancements to its search program as well.Google says it hasn't heard anything from Yahoo or MSN to make it worry."There's been nothing that's announced that makes me want to change what we do," says Richard Holden, director of production management for Google's paid search programs.
(USA Today, May 14, 2006)
Struggling to make a dent in rival Google Inc.'s dominance over online search, Yahoo Inc. reported a quarterly decline in profit Tuesday but managed to match already lowered expectations. (...) During a Tuesday conference call with analysts, Susan Decker, who was promoted to president when Semel was replaced by Yang, acknowledged Yahoo's past failings.She said the company had been slow to recognize emerging trends in online advertising and that Yahoo's management structure was overly complex, opening the door for more nimble competitors. (...)Yahoo commanded an 18.3% share of paid-search marketing spending in June, up from May's 17.8%, Rohan said, but June's percentage is still the third lowest at Yahoo since January 2006."Google continues to dominate spending with over 75% market share," he wrote. "Panama stabilized Yahoo's market share slide, but has not reversed it."Rohan said that even with Panama, advertisers see a better return on investment with Google, which boasts higher click-through rates at lower prices. "Yahoo's Panama was modestly successful but only temporarily halted Google's gains in marketshare," he said.
(Hollywood Reporter, July 18, 2007)
Despite the hopes of many and rumors that Yahoo would post "strong" earnings, Q4 2007 results were mixed, and net income was down from a year ago. In addition, CEO Jerry Yang said the company faced "headwinds" in 2008 and offered weak guidance but promised a return to growth in 2009. Investors were unhappy, and stock was down at one point 10 percent in after-hours trading (this morning it has recovered).Total revenue in Q4 was $1.83 billion, which represented 8 percent growth of the same period a year ago ($1.7 billion). Full year 2007 revenues for Yahoo were $6.97 billion. Simultaneously, Yahoo announced it would be cutting 1,000 jobs.
(Search Engine Land, January 30, 2008)
Monday, 4 February 2008
Google troubled by Microsoft move
In a blog, Google said the tie-up could unfairly limit the ability of consumers to freely access competitors' email and instant messaging services.
It said Microsoft had previously sought "to establish proprietary monopolies".
Microsoft made an unsolicited offer for Yahoo on Friday, and Yahoo has said it is considering the proposal.
Microsoft's hostile bid for Yahoo raises troubling questions
David Drummond, chief legal officer Google
Brad Smith, Microsoft's general counsel, said that the combination of the two companies would create more competition.
The takeover, if it goes through, would establish a "compelling number two competitor for internet search and online advertising", he said, insisting that "Microsoft is committed to openness, innovation, and the protection of privacy on the internet".
'Underlying principles'
But that view is not held by the top executives at Google.
"Microsoft's hostile bid for Yahoo raises troubling questions," said David Drummond, Google's senior vice president for corporate development and chief legal officer.
"This is about more than simply a financial transaction, one company taking over another. It's about preserving the underlying principles of the internet: openness and innovation," he said in a company blog.
This is clearly Google's opening move in a complex game of chess that will encompass ordinary users, politicians, regulators and businessmen
Mr Drummond suggested Microsoft may attempt to exert an "inappropriate... influence" over the internet.
"While the internet rewards competitive innovation, Microsoft has frequently sought to establish proprietary monopolies - and then leverage its dominance into new, adjacent markets," he said.
In 2004 the European Commission fined Microsoft 497m euros for abusing its market dominance, a ruling the US company finally lost on appeal in September last year.
The Commission has since launched two new competition inquiries against Microsoft.
Members of the US Congress Judiciary Committee will scrutinise the bid on 8 February.
Rebuff?
Reports said Yahoo would consider an alliance with Google as one way to fend off Microsoft's bid.
The Wall Street Journal reported on Sunday that Google's chief executive Eric Schmidt called his counterpart at Yahoo, Jerry Yang, to offer his company's help in any efforts to rebuff Microsoft.
Google's efforts aside, analysts say a bidding war for Yahoo looks unlikely given Microsoft's deep pockets.
Microsoft's proposed bid, unveiled in a letter to Yahoo's board on Friday, is 62% above Yahoo's closing share price on Thursday.
Time Warner, News Corporation, AT&T and Comcast are some of the firms that are often named prospective suitors for Yahoo.
But, according to the New York Times, none of these companies have begun work on any rival bids.
Yahoo! and the future of the Internet
e PC? While the Internet rewards competitive innovation, Microsoft has frequently sought to establish proprietary monopolies -- and then leverage its dominance into new, adjacent markets.Could the acquisition of Yahoo! allow Microsoft -- despite its legacy of serious legal and regulatory offenses -- to extend unfair practices from browsers and operating systems to the Internet? In addition, Microsoft plus Yahoo! equals an overwhelming share of instant messaging and web email accounts. And between them, the two companies operate the two most heavily trafficked portals on the Internet. Could a combination of the two take advantage of a PC software monopoly to unfairly limit the ability of consumers to freely access comp
etitors' email, IM, and web-based services? Policymakers around the world need to ask these questions -- and consumers deserve satisfying answers.This hostile bid was announced on Friday, so there is plenty of time for these questions to be thoroughly addressed. We take Internet openness, choice and innovation seriously. They are the core of our culture. We believe that the interests of Internet users come first -- and should come first -- as the merits of this proposed acquisition are examined and alternatives explored. Friday, 1 February 2008
Windows Seven: We're Hiring!
The software giant is looking to hire a technical evangelist for Windows Seven. That sounds like a really good idea to me. But Microsoft had better hire someone who can be more thought leader than mouthpiece—a straight talker who can generate genuine enthusiasm while setting realistic expectations.
Longhorn really hurt Microsoft's credibility. In early 2004, Microsoft started breaking feature promises made in late 2003—and the broken promises continued through 2005, as Microsoft dumped more and more Longhorn (aka Windows Vista) features.
The Windows Seven evangelist needs to sell benefits while not overstating them. In fact, Microsoft needs someone who can sell aspiration around limited benefits so that people can get excited about the product and the company can deliver more than promised later on. People buy things because they want to be happy, to believe their lives will be better from the purchase. Apple sells aspiration so well, and Microsoft needs to, too.
The shoes are mighty big. Maybe Microsoft should call on the Friendly Giant. The job posting is dated Dec. 11, 2007, but Microsoft hasn't yet filled the position. It's a big, big job.
The requirements are daunting. Microsoft wants someone with five to seven years experience with .Net Framework, great communications skills and developer community leadership skills. That's for starters. The company also wants a diplomat, analyst and great public speaker. I'm surprised there's no call for a sociology degree.
In a blog post today, Microsoft evangelist Tim Sneath explains: "This isn't a 9 to 5 job: it's more of a vocation—you'll work hard not because you've got someone breathing down your neck but because you're passionate about making a difference and you see the impact of your work."
Really? Sneath describes the job as a "once-in-a-lifetime open position." The position is "the technical evangelist at this point in time. This is an extremely challenging, high-profile senior role, with tremendous reach and influence across the organization."
Sneath has got the "challenging" part right. I wouldn't envy anyone taking on this role, given Vista's reception, the state of mind IT organization and consumers have about operating systems or the rapid computing market shift to the services-plus-software rich Web 2.0 platform.
Stated differently: Microsoft needs someone who can make developers, enterprise customers, OEMs and technical enthusiasts feel good about Windows again. More importantly: The Windows Seven technical evangelist must sell something bigger than the operating system, something intangible: The Microsoft lifestyle.
All truly successful products—meaning those products that customers really love—imbue a lifestyle. There is an Apple lifestyle associated with Macs or a motorcycle lifestyle associated with Harley-Davidson.
The Microsoft lifestyle is a tough sell, because it is so potentially big. Microsoft products do so much and interconnect with one another in so many ways, their benefits aren't always obvious. They're tough to market. Perhaps the technical evangelist will have to sell many small lifestyles.
For the last month, I've been trying to live the Microsoft lifestyle, which, strange as it may sound, is helping me to better identify what it is. I'm using a Windows Mobile phone and Vista PC. I've got Windows Live Mail on the PC and phone. Then there is Office 2007 and Office Live Workspace... and so on. Different products connect together, creating nuances of different computing lifestyles. But that's for another post, on another day when my head isn't foggy from the flu.
Microsoft Watch readers, what would you want to hear from the Windows Seven technical evangelist? What message should he or she convey? What do you need to hear from him or her to regain confidence—for anyone that has lost it—in Windows?
Microsoft Offers to Buy Yahoo for $44.6 Billion
The $31-a-share bid of cash or Microsoft stock is 62 percent more than Yahoo's closing price yesterday. Before today, Yahoo had dropped 18 percent this year in Nasdaq Stock Market trading, and this week posted a 23 percent profit decline for the fourth quarter.
Microsoft Chief Executive Officer Steve Ballmer is attempting the biggest-ever technology takeover after failing to compete with Google in a
market that may almost double to $80 billion by 2010. Google has grown faster than Microsoft in every quarter since Google's 2004 initial public offering as its search engine won more users.``Microsoft is under massive pressure to expand its Internet business to fend off competition from rivals such as Google and this deal shows how desperate they are,'' said Thomas Radinger, a fund manager at Pioneer Investments in Munich, which oversees about $95 billion, including Microsoft shares. ``It's a huge gamble as the price is very steep and it will take years to successfully integrate such a massive acquisition.''
Yahoo rose 51 percent to $28.90 in early trading after closing at $19.18 yesterday. Microsoft, based in Redmond, Washington, fell $1.30 to $31.30 after closing at $32.60 yesterday in Nasdaq trading. Google fell 6 percent to $530.51.
Yahoo, based in Sunnyvale, California, said today that it plans to evaluate the proposal ``promptly.''
Yahoo's Stumble
Yahoo's inability to crack Google's dominance in search has led to eight straight quarters of declining profit and a stock that's lost half its value in the past two years.
``It shows how serious the threat is from Google,'' Jordan Rohan, an analyst at RBC Capital Markets in New York, said in an interview. ``Yahoo is vulnerable. Investors are losing patience with the Yahoo management team.'' The New York-based analyst rates the stock ``outperform.''
Google yesterday reported a 52 percent increase in fourth- quarter sales growth, its 14th straight quarter exceeding 50 percent. Still, profit and revenue trailed analysts' estimates as it received less money than expected from ad deals with social- networking sites like News Corp.'s MySpace.
Google, based in Mountain View, California, captured 56 percent of U.S. Web queries in December, almost double the combined share for Yahoo and Microsoft, which attracted 18 percent and 13 percent, according to New York-based Nielsen Online. Searches will account for 37 percent of the $27.5 billion U.S. online advertising market in 2008, estimates research firm EMarketer Inc.
Yahoo's Investments
Yahoo has also lost sales in the market for graphical, or display, ads to social-networking sites like Facebook Inc. and MySpace. Co-founder Jerry Yang replaced Terry Semel as chief executive officer in June to reignite sales growth. Microsoft increased competition with Google by agreeing to buy a 1.6 percent stake in Facebook, the second-most visited social- networking site.
About half of Yahoo's market value comes from its investments in China's Alibaba Group and Alibaba.com, Yahoo Japan and South Korea's Gmarket Inc. The company said this week that the value of those investments was more than $10 a share in the latest quarter.
Yahoo Rejection
Microsoft and Yahoo explored ways to work together in late 2006 and early 2007, according to a letter Ballmer sent to the Yahoo board. Yahoo rejected the idea of being taken over by Microsoft a year ago, the letter said.
``This combination provides value to advertisers in the form of more scale and more inventory,'' Kevin Johnson, who runs Microsoft's Windows and Internet group, said in an interview. ``It provides value to publishers, in terms of integrating the ad platform.''
Yahoo was founded by Yang and David Filo while the two were graduate students at Stanford University in 1995. The co- founders, who own a combined 9.8 percent of Yahoo's stock, took the company public a year later. After a three-year jump in the stock price, they were each worth $4 billion, according to Forbes Magazine. Then the market crashed in 2000, wiping out 86 percent of Yahoo's market value.
The purchase would be the largest acquisition ever in the technology industry, surpassing Kohlberg Kravis Roberts & Co.'s $26 billion acquisition of First Data Corp. last year, according to data compiled by Bloomberg.
Acquisition History
There have been bigger media and telecommunications deals. America Online Inc. in 2001 bought Time Warner Inc. for $124 billion to create the largest Internet and media company. In 2000, Vodafone Plc of the U.K. paid $175 billion for Mannesmann AG, Germany's biggest mobile-phone company.
Today's offer would dwarf Microsoft's previous largest acquisition, last year's $6 billion takeover of AQuantive Inc. Ballmer pursued the purchase after Google agreed to buy DoubleClick Inc., an AQuantive rival, for $3.1 billion.
Microsoft opposed the DoubleClick acquisition, claiming it will give Google too much control over the online ad market. The deal is under review by European regulators.
Microsoft's bid to challenge Google in online ads results from slowing growth in the computer software market. Microsoft also faces challenges in that business from Google, which now offers applications for word processing, spreadsheets and presentations over the Web.
Underground Software
Thursday, 31 January 2008
Microsoft hits back at EU threats
Microsoft has hit back at European Commission accusations that it has not complied with demands to provide data relating to an anti-competition case.
It was given until Wednesday to prove it had provided rivals with computer codes that would let them develop products to work with Windows systems.
Microsoft said that Brussels ignored a 75-page report from the company explaining and addressing the concerns.
The company is facing daily fines of 2m euros (£1.4m; $2.4m).
"The Commission has ignored critical evidence in its haste to attack the company's compliance," Microsoft said in a nine-paragraph statement.
"Microsoft has complied fully with the technical documentation requirements," it added.
'Detailed documents'
It went on to accuse the Commission of helping create the problems.
"The Commission repeatedly refused to clearly define its requirements and concerns, despite repeated requests and accommodations by Microsoft," it said.
Microsoft's problems date back to March 2004, when Brussels hit it with a record 497m euro fine for abusing its dominant position.
As well as the fine, Microsoft was ordered to share technical data that would allow rivals to make their programs compatible with Microsoft's products.
The Commission complained in December that the company was dragging its feet and not living up to its requirements.
Microsoft complained on Wednesday that that was not the case
"Hundreds of Microsoft employees and contractors have worked for more than 30,000 hours to create over 12,000 pages of detailed technical documents," it said.
Microsoft has called for an oral hearing, that must be held before any fines can be imposed.
Microsoft unveils Vista editions
Three versions of the software, called Vista, will be for home users, two will be for businesses and one will be for emerging markets.
One of the home versions of Vista will include features that let users store and play back TV shows.
No fixed date has been given for the release of Vista but it is expected to be launched by the end of 2006.
Launch line-up
Vista, which was known as Longhorn during its long development, is a major re-working of Windows that makes changes, among other things, to the way the operating system looks and how it handles networking and sound.
Microsoft said the six versions were designed to match the demands different users have for its software. No details have been given about the pricing of the separate versions.
VISTA VERSIONS
Vista Business
Vista Enterprise
Vista Home Basic
Vista Home Premium
Vista Ultimate
Vista StarterVista Business will be the basic version for companies of all sizes and includes tools that will help organisations manage their PCs.
The Enterprise version of Vista will have all of the features in the basic version and add to them improved encryption including a BitLocker system that will stop confidential data being viewed if a computer is lost or stolen.
The Home Basic version is intended for those who only want to use their PC to browse the net, use e-mail and create and edit basic documents. It will also include desktop search and security tools.
Vista Home Premium includes everything in the Basic version and adds the new graphical interface called Aero.
Microsoft said it will also have improved media handling abilities so it can help users organise and enjoy their digital images, music and movie collections. Also included will be tools to help people author and burn DVDs.
PCs running the Premium edition will also be able to connect their machine to an Xbox 360 gaming console.
Vista Ultimate has all the features of the business and home editions in one package.
The Starter edition is a streamlined version intended for low powered PCs found in many developing nations.
Also available will be versions made specifically for Europe that, in accordance with an EU mandate, remove the Windows media player.
Microsoft pointed out that the current version of Windows, XP, is available in six different versions though most of these are tuned for the different types of hardware, such as a Tablet PC, people are using.
By contrast Vista versions are organised by what people plan to do with their computer.
"We don't want customers to be forced into buying something that isn't going to meet all their needs," said Barry Goffe, Microsoft's director of Windows client product management.
Monday, 28 January 2008
PM, Gates inaugurate Microsoft Centre
Prime Minister Costas Karamanlis, Microsoft Corporation founder and chairman Bill Gates, and economy and Finance Minister George Alogoskoufis on Monday inaugurated the Microsoft Innovation Centre in Athens.
Karamanlis noted that "a society develops and progresses to the degree that it gives its members the opportunity, the tools and the liberty to open up new roads of progress themselves, in accordance with their own dreams, abilities and ambitions", and stressed that "this principle of a people-centered economy of knowledge and innovation is embodied and served by Bill Gates, with his business, as well as his multi-faceted humanistic activity".
Karamanlis said that the building housing the Centre would serve as the operational hub of an important institutional cooperation aimed at strengthening innovation in Greece through full exploitation of the abilities of new technology, and concerns the public sector, business both small and large, education and youth.
"The goal is, one the one hand the application of all the already available software tools in the economy and society, and on the other hand the development and production of new software applications," Karamanlis said.
The aim, he continued, is to ensure better services, boost competitiveness, and encourage the creativity, talent and innovative thought of the Greeks, as well as to provide the youth with a significant opportunity to try out their ideas in their own country, without having to move abroad, and to encourage new entrepreneurship and strengthen the branches of IT, communications -- the entrepreneurship that is linked with the internet and its applications -- as a percentage of GDP.
Karamanlis explained that the collaboration with Microsoft was an organic part of the government's strategy for the digital age, "a strategy that is already producing positive results, having made up much of the lost ground of the past".
The growth rates alone of the broadband penetration index were proof of the country's new orientation, he said, adding that in just a short time, Greece had moved from "laggard" to a dynamic entry into the group of pioneer countries with respect to the use of new technology and, day by day, with determination, was acquiring the infrastructure to strengthen its role in the production of new applications as well.
He said investment in information technology and communications technology was a prerequisite for the wider reform break from the past that the country so needed.
It was a condition so that Greece may play a leading role in the new globalisation of knowledge, as the natural manager of the immense legacy of Hellenism's historical and cultural heritage, but also as a hub of creation of new knowledge and new invaluable tools for the past and the common future of humanity.
Karamanlis explained that there were two approaches in life, politics and the economy: the first approach was to remain at the stage of pinpointing the problems, of ascertaining the imperfections that hindered us from moving ahead, "it is the stage of conservatism and pettiness". The second approach, he continued, was that of moving beyond pinpointing and ascertaining, it was a life stance that dares to tackle the problems and which, instead of waiting to see what the future would bring, dares to prepare the future, with targets and specific actions.
"We need this second approach, and with initiatives such as this being inaugurated today with Microsoft's founder, Mr. Bill Gates, with initiatives for innovation and creativity, we are laying the foundations so that this life stance will take root and prevail, for the benefit of the country and our society," Karamanlis concluded.
Alogoskoufis, in turn, said the Innovation Centre was part of the Greek state's collaboration with Microsoft in the framework of the government's digital strategy.
He said the Centre would function as an "incubator" for new software applications which, if proved effective, could be disseminated throughout the world.
Referring to the digital strategy being followed by the government over the past four years, Alogoskoufis stressed that knowledge and technology, as well as utilisation of the human resources, was decisive factors for a country's prosperity.
Microsoft moves into VMware field
Last week, the software giant announced its strategy, including the acquisition of virtualisation software vendor Calista Technologies, the expansion of partner relationships and several virtualisation technologies. Neil Sanderson, UK product manager for systems centre virtualisation at Microsoft, said: “The virtualisation market is in its early stages, so there is room for competition.“Microsoft’s virtualisation push is to ensure partners and end users are aware of the choices and where best to invest their infrastructure.”Microsoft also expanded its relationship with alliance partner Citrix by developing a tool to transfer virtual machines between Citrix XenServer and Windows Server 2008 Hyper V for interoperability.“Resellers can offer their customers more choice through interoperable technologies. Microsoft has a virtualisation platform for its partners so take advantage of it and use it. It may also attract new partners that already specialise in virtualisation,” added Sanderson.Matt Piercy, channel director for northern EMEA at VMware, said: “The vision announced by Microsoft is encouraging for VMware’s customers, however, it is still not delivering the dynamic environment that VMware has offered since 2006.”Terry Walby, datacentre solutions manager at corporate VAR Computacenter, said: “We are a VMware and Microsoft partner. For us, it is about what is more appropriate for the customer environment.”Hamish MacArthur of analyst MacArthur Stroud, said: “It will be an interesting fight.”
