Daily Archives: November 5, 2011

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Microsoft slams ‘Google’s graveyard’

Along with other interesting analogies

A Microsoft spokesperson has slammed Google for its ‘see if it sticks’ approach to product development, claiming that the ‘Google graveyard’ full of defunct programmes shows that the search giant isn’t able to provide reliable services for business users.

Tom Rizzo, director of Microsoft SharePoint products and technologies, wrote a blog post likening Google’s product management to cooking spaghetti:

“Google releases experimental products and tracks adoption to determine whether to continue providing them. Its products are like spaghetti, Google throws them up against the wall to see if they stick.”
Hasta la pasta

To illustrate the point, he cites Google Wave, Google Aardvark and Google Buzz as three examples of non-stick spaghetti.

“It is clear that Google’s product management practice is haphazard and noncommittal, resulting in its deliveries often falling short of expectations,” he said before going on to extol the virtues of Microsoft’s product support system.

What is it with Microsoft and weird tech analogies this week? First it was search being like Buffy and Knight Rider, now it’s Google Buzz being like undercooked pasta. A bar’s been set here, Microsoft – better get those thinking caps on for the next one.

 

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Europe Approves Microsoft Purchase of Skype

The European Commission on Friday approved Microsoft’s $8.5 billion purchase of Skype, saying it had no objections to a deal that would link the world’s largest software maker with the leading Internet communications service.

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While the assent from the European competition commissioner, Joaquín Almunia, is not the final antitrust hurdle for the transaction — regulators in Russia, Ukraine, Serbia and Taiwan are still deliberating — the positive review from Brussels was considered the last significant threat to what would be Microsoft’s largest takeover to date.

The U.S. Federal Trade Commission approved the transaction in June.

In voicing no objections to the deal, Mr. Almunia, a Spanish economist, chose not to act on a complaint from an Italian competitor to Skype, Messagenet of Milan, which had asked that the deal be blocked unless Microsoft opened Skype’s 124-million user network to competitors.

Mr. Almunia in February approved Microsoft’s purchase of the search advertising business of Yahoo. This time, the competition commissioner said he was approving the purchase of Skype “because the deal would not significantly impede effective competition,” according to a statement by his office.

In the consumer communications business, the commission said Microsoft and Skype overlapped only in video communications, which Microsoft offers separately through its Windows Live Messenger program.

“However, the commission considers that there are no competition concerns in this growing market where numerous players, including Google, are present,” the commission said in its statement.

In the sale of Internet communications to businesses, Skype had only “a limited presence,” the commission concluded, which did not overlap with Microsoft’s Lync Internet communications software, used by large companies.

Microsoft, in a statement, called the European approval “an important milestone. We look forward to completing the final steps needed to close the acquisition.”

The approval from Brussels will expedite the fusion of Microsoft, maker of the ubiquitous Windows computer operating system and Office business application suite, with Skype, an Internet seller of free and low-cost audio and video telephony founded in 2003 by Niklas Zennstrom, a Swede, and Janus Friis of Denmark.

During the past eight years, Skype has become the largest provider of Internet-based communications. But profitability has remained elusive.

A previous owner, eBay, which bought Skype for an estimated $2.6 billion in October 2005, was not able to integrate Skype profitably into its online auction business. In October 2007, eBay took a $1.4 billion impairment charge reflecting what it estimated that it had overpaid for Skype.

Last November, eBay sold a 70 percent stake in Skype to an investor group led by Silver Lake Partners for an estimated $2 billion.

Microsoft, which announced its agreement to buy Skype on May 10, is paying nearly three times Skype’s market value, as measured by the sale of eBay’s stake almost a year ago to private investors.

Leif-Olof Wallin, an analyst in Stockholm for Gartner, said Microsoft would use Skype to bolster its push into Internet-based telephony around its Lync software for businesses. With Skype’s huge user base, Microsoft will be able to greatly expand the availability of low-cost Internet telephony, Mr. Wallin said.

He added that Microsoft’s distribution of Skype through its Windows operating system would improve the image of Internet calling, especially among businesses, which are increasingly encouraging workers to use their own computers and software for company business.

That will make Microsoft more of a direct competitive threat to Cisco Systems and Avaya, the two biggest companies that sell Internet-based telephone service software for businesses.

But it will also accelerate downward pressure on long-distance and international calling prices, Mr. Wallin said.

“Once it is preloaded on a device, whether it is a computer or a phone, it becomes more convenient to use,” Mr. Wallin said. “That will make consumers more likely to discover and try it.”

Whether Microsoft can generate a profit from Skype, or create profitable synergies with its other software services and products remains unclear, said David W. Cearley, an analyst for Gartner in Stamford, Connecticut.

“I do not believe that direct revenue was the main reason for the purchase,” Mr. Cearley said. “The main thing that Microsoft is buying with Skype is brand presence on the Web and a customer base.”