Category Archives: microsoft

Oh yeah some money changed hands (Opera switches from Yahoo to Google for Search)

Posted by Todd Sawicki on February 27, 2008 View Comments

Presumably with a straight face Marshall Kirkpartrick over at Read/Write Web writes about Opera switching it’s default search provider from Yahoo! to Google saying “Presumably there’s some money changing hands.”

Ya think?  Search distribution is a big money game.  Google pays $10 per box to Dell for pre-installing the Google Toolbar and pays Mozilla just under $100 million a year. Market rates for toolbar or embedded search box (ie. built in search box in Opera or Mozilla) distribution are steep – Google pays anywhere from $1.50 to $10 per new user from what I understand with most top tier deals in the $3-6 per user range.  I’ve seen estimates that Google makes $12 per user per year per toolbar or embedded search box installation.

What’s interesting is how Google’s dominance becomes self-reinforcing.  Because Google makes more money per search then Yahoo! it can always outbid Yahoo! for distribution deals (on a rational economic basis that is Yahoo! could always overpay).  So no one should be surprised when Google beats Yahoo! on a financial deal based on search economics.  Yahoo! should lose everyone of them.  Now this once again leads us down the Google paid search monopoly path where Google buys market share at a rate no one else can pay.  Just not in the bullying fashion that MSFT was accussed of back in the day.

linkedin in play? if so where’s yahoo and msft?

Posted by Todd Sawicki on November 22, 2007 View Comments

My online penpal Allen Stern passes along the rumor that Fox Interactive Media is in discussions to buy the business networking behomoth LinkedIn.  Bravo – I say.  Linkedin would certainly offer a nice counter weight to the antics displayed within most MySpace profiles.  And if identities online stay splintered (personal dairy on MySpace, professional relationships on LinkedIn) then it’s a really, really smart play by FIM.

And before anyone pooh-poohs LinkedIn in comparison the hotness of Facebook – Facebook still has a long way to go in the professional world.  Every business contact I make these days is active on LinkedIn.  Well less then half of those same contacts are currently using Facebook.  Facebook’s catching up but it has a long way to go.

But I wonder why Yahoo and Microsoft aren’t rumored to be in on the talks as well.  LinkedIn could be a valuable asset to each’s desires to remain relevant in the world of the social graph.  And given LinkedIn’s relatively strong subscription base of recruiters and sales professionals it’s not a flight of financial fancy necessarily.

Perhaps Yahoo is content flailing along with the largely irrelevant Yahoo 360 and doesn’t really need one of the top 10 most successful social networks to date.  Maybe Microsoft doesn’t want to own the properties but just monetize them.

Time will tell.

valleywag calls it – facebook is the new microsoft

Posted by Todd Sawicki on July 30, 2007 View Comments

Valleywag – one of my favorite daily tech reads (please owen start covering the scene here in seattle) – posts what I believe a lot of folks are wondering – is facebook the new microsoft?  Facebook is following the Microsoft development platform playbook (as discussed here previously) with their F8 application development platform.  Suddently there are hundreds of ISV’s running around creating new facebook apps much like Microsoft was ultimately able to create hundreds of thousands of ISV’s for Windows.   However for much of its history though Microsoft was notorious for suposedly eating its young (the ISV’s) and their custom applications (for us old timers who doesn’t remember the bloom county version called Microsquash?).   As Owen Thomas from Valleywag writes - Facebook developers, you’ve been put on notice.

My point isn’t necessarily to rain on the FB app parade as I think it’s got a ton of opportunity and have plenty of ideas for apps myself.   What’s interesting is that just last week I had a very similar conversation with a VC friend of mine.  My VC friend is awfully concerned about FB eating its young.  His counsel on investment ideas around FB apps is – be very careful.  He just can’t believe that FB will allow ISV’s to make unlimited amounts of money without FB getting a big cut.  And if FB gets a big cut, then my VC friend is concerned as to whether there’s enough money on the table for the app developer to make it big financially.

And if not, then FB will just eats its young and make the money themselves since there is nothing to stop them.  Just a reminder that as much as Scoble and Dave McClure are smoking the FB crack-pipe (and to an extent rightfully so), all of us looking at FB as the new startup business playground need to think about the risks that the current environment might contain. 

OK you may now return to your favorite FB hype-fest.

scoble’s right about microsoft and apple

Posted by Todd Sawicki on July 10, 2007 View Comments

Scoble’s right in his feedback about the recent adhoc iPhoneDevCamp recently down in the bay area and the lack of support from Apple.  Despite everything we’ve all grown to love to hate about Microsoft, if there is one it does right - it knows how to support independent developers.  They always have going back to the earliest days of the companies history.  They have often done a great job participating in dev communities, recruiting dev’s and evangelists and providing everything they can in terms of support.  Even in the earliest days of the company, if they knew you were an active user group member then you would be get starred for special customer support treatment.  To Scoble’s point it is absolutely one of the key reasons why Microsoft has been successful.

Living in Seattle and having worked at startups that have gotten the partner and ISV treatment and I can tell you first hand that Microsoft is very generous with its support.  And in this day and age where anyone can be a loud and influential evangelist its amazing to see companies like Apple get away with not overtly engaging their key influencers and developers in every possible way.  Maybe this will change, but Apple’s arrogance cost them the desktop war, hopefully they will see the errors of their way and not fail again.  I would hate to see Steve “Jesus” Jobs fail twice with the same company.

holy-valuation bat-man! microsoft buys aquantive

Posted by Todd Sawicki on May 18, 2007 View Comments

Microsoft (Ticker: MSFT) announced that it was buying its Seattle neighbor aquantive (Ticker: AQNT) this morning for a whopping $6 billion!!!!!  Aquantive is best known for its two main business units – Avenue A (media planning agency) and AtlasDMT (ad server).  Congrats to all my friends who work their now and worked in the past and still own the stock.  All I have to say is wow.   MSFT is paying a 133x multiple of net income and more importantly 46x multiple of this year’s EBITDA!  From my M&A experience that’s a one hell of a multiple.  If that multiple was applied to some of the companies I hold stock, let me just say my wife would get off my back about all my gadget spending.

quote of the day

Posted by Todd Sawicki on April 26, 2007 View Comments

“no he’s not a typical microsoftie, even people at microsoft think he’s an asshole”

made me laugh :)

Does Google own the Internet?

Posted by Todd Sawicki on April 23, 2007 View Comments

My friend Andy pens that Google owns the Internet in the same way Microsoft owned the PC in the 90′s.  I don’t know if I agree that Google owns the Internet but it does currently own monetizing the Internet or at least until someone figures out how to monetize social networking and media traffic.  For anyone who has touched myspace traffic via ads or widgets will tell you – Myspace owns consumer traffic. 

how to become a monopolist: the google story

Posted by Todd Sawicki on April 15, 2007 View Comments

Hmmm advertisers are growing wary of Google’s market position with the purchase of DoubleClick according to AdAge.  Market concentration is a serious problem for competitors and customers and will be an important issue for the online ecosystem for at least the next 10 years.  Whether Google plays nice or not will be seen.

The title of the post sounds like a catchy title for the google story someday after they get sued for their monopoly in the online advertising market – vertical, tied integration, unfair competition due to bundled services that undercut competitors (ie. google analytics), and marginal pricing… I can practically read the complaint now ;-)   Seriously who knows whether it will come to pass, but as I wrote about earlier – all the previous tech titans have gotten sued for antitrust violations (ibm, intel, and microsoft) so it is not that far-fetched.

UPDATE:  As if on cue in response to my post here (trust me I know it wasn’t really) – Rafat over at Paidcontent.org posts a good summary of other coverage where Microsoft, AT&T and Time Warner all raise the anti-trust/anti-competitive flag.  I guess I wasn’t too crazy for bringing up the idea a few months ago.

UPDATE2: I just created a bet over at Blubet (a new social betting for fun startup – thanks Sr. McClure for introducing) so people can put their Blubet points where there mouths are.

DIY/NIH: The Economics of Abundance and Startups

Posted by Todd Sawicki on April 10, 2007 View Comments

Fred Vogelstein’s interview with Eric Schmidt presents an interesting story about classic DIY/NIH impulses that comes from engineers and developers - in this case Larry and Sergei desire to build a financial system themselves instead of buying one from Oracle.  At every startup I have worked at this desire comes up.  Developers are builders and they like to build things and more importantly they like to know how things work which they often feel comes from building things themselves.  And as a business guy, you will often find yourself wanting to hit your head against the wall as your dev teams want to build things that should just be bought.  For instance at a fomer company, the devs tried to build their own CRM system.  Let’s just say that Salesforce.com is currently the CRM system being used there.  Lesson learned.

At some level hearing the Google story is encouraging to hear that what I have experienced with developers is not unique.  But it’s interesting how a lot of the innovation in the web 2.0 ecosystem absolutely flies in the face of the developers’ natural instinct to build it themselves.  Numerous VCs and entreprenuers have talked about how its easier and cheaper then ever to do an internet-based startup because you can outsource so many elements of the business – accounting software, CRM, hosting, email, storage and even CPU hp thanks to Amazon’s Web Services.  And in startups where resources are scarce (and money even scarcer), you have to leverage whatever cheap, outsourced alternatives you can so you and your team can focus on building the nugget of IP and value that makes all those back-end services unqiue to your customers.

Today only in enterprises where abundance is king – and Google certainly qualifies much like Microsoft in its hey day – can you even think (however irrationally it likely will be) about building or doing things yourself.  It will be interesting to see how the excess of profits that Google enjoys plays out in terms of building enterprise value or whether Google’s cultural bias to build things themselves ends of wasting billions of dollars of enterprise value.

Personally as I embark down my own startup paths, I can certainly tell you that I am big fine of the innovation in outsourcing and plan on outsourcing as much as humanly possible.

windows vs. os x – windows 1, os x 0

Posted by Todd Sawicki on March 9, 2007 View Comments

to all the apple maniacs out there who love to tout how bullet proof their os is, all i have to say now is – b.s. last night my shiny six week old macbook began crashing every time i tried to boot it up. all i got (and am still getting) is the lovely apple equivalent to the windows blue screen of death.

and i have tried everything, boot discs, os x install discs, everything, with nothing working. i have never experenced something so intractable in the 15 years I have been using ms windows (i have used mac’s on and off for 20 years so i am no windows bigot). never. what a pita. and to top it off, applecare take support, unlike ms tech support, is only available via phone until 6pm pac time. seriously does apple not think someone might want to tech support at night? what a pile of crap. can you tell i am pissed off right now?

i know it’s not the hardware either since i have boot camp and i can run windows just fine (the os I am writing this from). how’s that for an irony? windows works, while os x doesn’t.

score: windows 1, os x 0.