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The world’s leading software company, Microsoft is the force behind the Windows operating systems and the Office suite of software.
There are very serious questions about management. For $8.5 billion, Microsoft should have been able to build a Skype clone, buy 10 million users, and return $7.5 billion to shareholders. But they didn't. They spent the whole wad on acquiring Skype. Why couldn't that be in-housed? (Why couldn't the Kin succeed, or the Zune?)Now Ballmer comes out talking about Windows 8, and the corporate office has to remind him the next day that it's not announced yet and they still have a Windows 7 product cycle to get through first. How much damage did this do to revenues, due to late adopters who now are just going to hold on for another 12-18 months?More importantly - how does Ballmer make an error like that? Maybe he doesn't *know* what his company's flagship product is, or what the timeline of its next rollout is? Well, that's OK - he's just the CEO?Seriously? This ship is adrift without a rudder. Paul Allen's owning sports teams and buying famous guitars, Bill Gates is traveling the world giving money away, and Ballmer is back to what he knows best - selling widgets, like vacuum cleaners or used cars. That's not what MSFT needs to dominate in 2012.
They bought skype's user base, not just the software.
Thank you ikkyu! Why did they not just make a duplicate to Skype? How easy would that've been... sure Skype has name recognition, but it's not God by any means. The program is clunky and slow, and I'm sure users would be glad to jump ship in MSFT came up with a functional working alternative. Oh wait, Balmer's still CEO. Gates needs to step in and save this company or else watch it fall like a WW2 bomber in the sky
What your saying makes sense except MSFT hasn't been very good at making clone's of anything (i.e. windows phone, zune, pretty much the microsoft version of most products) so it's sort of the worse of two evils: make your own sub-par version or overpay. I do think they overpaid but also feel thats priced in and that the stocks a buy solely on valuation.
As much as I like MSFT as a stock, I cannot help but find what you say amusing. MSFT has been less than perfectly successful at making clones of anything lately. But I cannot name one of MSFT's core products that is not a clone of something: CP/M -> MS-DOS WordPerfect -> MS Word Mac OS -> MS Windows Lotus 1-2-3 -> MS Excel dBase -> MS Access Playstation -> XBox Salesforce.com -> MS Dynamics CRM (I don't know where they got the inspiration for MS Powerpoint) Typically their strategy seems to clone the most successful product in a given market, price it lower than the original and "integrate" it with their core Windows/Office offering, right until the sweet spot where it becomes economically more viable for the customer (=IT department) to switch to the Microsoft offering for lower total cost and "convenience" of using a whole bunch of MS products at once. However, this strategy seems to have worked much less well when the customers are actual consumers who make their own decisions, not corporate IT departments. The Skype acquisition seems to follow the logic they applied with Hotmail: too successful to ignore; possible to re-create but too difficult tie in as a stand-alone boxed application to go with MS Office. So they bought it.
just make sure you get out of the way when this ship unfurls its sails again, Ikkyu2
They do remove a competitor by buying Skype and also remove an acquisition target by other competitors. May not be worth $8.5 B, but still considerations.
Oh, I'll get out of the way, JPAK. I'll know when it's time for MSFT to set sail again because first IBM will make a resurgence and once again own the hardware market. When that happens I'll start looking out for MSFT to regain its dominance in software. Soon afterwards, I will found a company that makes Selectric balls and ribbons, and then I will purchase a bunch of land and raise up cows to turn their skins into leather buggy whips - oh, the buggy is coming back, didn't you hear?It's against the law to acquire a company just to remove a competitor. If that'd been the primary purchase of this $8.5 B purchase, DOJ would've blocked it.As far as Skype's 10 million person userbase, at 8.5 billion they paid nearly $80 thousand per user. I bet they could have gotten folks to sign up for MicroSoftCall Pro for a one-time payment of $10,000 per user!
Tell me how you really feel about them.
Ikkyu2...It is a while since I was in school, but in my day $8,500,000,000/10,000,000 was $850. And $10,000,000*80,000 was $800bn.800 billion for Skype would probably have been a little excessive.
Building something in-house? It's way overrated and much easier said than done. Bill Gates might be still in his garage trying to build something useful if IBM had decided to build their entry into the PC world in-house, but they didn't and bought Bill's operating system and other components instead. The rest is history.....In IT, time is very valuable. Technology advances can pass you by while still trying to finish something in house. IMO the billions they spent buying skype bought them lots of the time and more that they needed to be competitive and fast track their entry into that nook.
After all is said and done, that purchase of skype could be the stroke of genius Ballmer was hoping for now that it's been adapted by no less than FaceBook.
I imagine this is how Steve Ballmer acted when he found out about the facebook/skype deal.http://www.youtube.com/watch?v=wvsboPUjrGc
How did MS fail to ensure synchronous communication with Outlook by Androids and even, God forbid, iPhones?. Why hasn't MS built its own cloud? Asleep at the wheel, or fat dumb and happy, or too bureaucratic, or what?
We have been using Microsoft Cloud since mid-2010 to host out client apps.
I can't help but to laugh at the non-sence I'm reading. It was all a cold war like tactic to go after apples iChat. That's it! Why build a clone and have 3 competitors than spending the same amount that would have costed you and go after your true competitor, apple. Like the us in the cold war they could have left other countries alone and gone straight after Russia but by spending a little more cash and time they converted those would be enemies into allies. Common sence people!
Let's recap Ballmer's greatest post-Gates hits.1) Zune.2) Kin.3) Windows Vista.The guy makes Megan Fox's film career look good. Can't wait to see what she's in next, can you?
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