Steve Ballmer, the CEO of Microsoft, has announced that his company has retracted its offer to buy out the struggling Yahoo.com in a multibillion-dollar stock offer. The retraction surprised many, considering that Mr. Ballmer had once called the Yahoo deal “crucial to the future of Microsoft.”
Meanwhile, Yahoo’s stock declined sharply on news of the Microsoft withdrawal, leaving shareholders wondering if the Yahoo overplayed its hand. Microsoft had offered $31 per share for Yahoo, a significant increase over the stock’s traded price, and a price-per-share not likely to be seen again for some time (if at all).
The New York Times is reporting that Mr. Ballmer even sent a courteous thank you note to Yahoo CEO Jerry Yang to convey his “personal thanks” for considering the Microsoft buyout offer. While this was obviously a very civil and gentlemanly thing to do, many Wall Street analysts are expressing concern that Ballmer may not have the “killer instinct” to push through aggressive deals like the proposed Yahoo buyout.
For now, Yahoo appears to be the loser in the transaction, but writing for the New York Times, Andrew Ross Sorkin points out that Microsoft has also been dealt a serious blow by their failure to aggressively pursue the Yahoo deal. Sorkin suggests that Mr. Ballmer “waffled” when Yahoo CEO Jerry Yang refused to simply cave in to Microsoft’s demands.
Microsoft, on the other hand, claims that the buyout withdrawal was a sign of Microsoft’s fiscal discipline and self-control. But there is no denying that some on Wall Street also view it as a sign of weakness and indecisiveness. Many believe Mr. Ballmer also failed to consider the opinions of Microsoft’s biggest shareholders before instigating the Yahoo buyout deal in the first place.
Most of the major Microsoft stockholders were opposed to the Yahoo deal. A fact that eventually led to Microsoft’s stock being diminished as well. The New York Times reports that Microsoft stock has lost $24 billion in overall value since the announcement of the Yahoo buyout offer.
Ballmer’s credibility as Microsoft CEO has also been significantly damaged by the failure of the Yahoo bid. At one point, he promised to take the bid directly to Yahoo shareholders if the Yahoo board failed to reach an agreement on the offer within three weeks. But then, inexplicably, he allowed the three-week deadline to pass without saying a thing.
The failed Microsoft-Yahoo deal shows that in corporate takeovers, even the losing party can come away looking like a winner — and vice versa.
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The “Cult of Apple” seems to be growing exponentially these days. The company is riding high on the success of the iPod, the iPhone, and the reputation that their personal computers have for reliability and ease of use. Now Apple can add another feather to its cap: best customer support.
Consumer Reports National Research Center released the results of its annual tech support survey Monday. The report reveals that only 60% of customers’ technical problems are successfully resolved by customer support representatives, showing that there is vast room for improvement in the tech support divisions of most computer retailers.
Interestingly, laptop users reported more problems than desktop computer customers. On average, a full 40% of laptops have to be repaired within three years of purchase — and in some cases, even need to be replaced. To put that into context, consider the report’s findings that only 10% of digital cameras require repairs within the same three-year period.
But even though the tech support industry in general scored low marks on the annual report, Apple’s customer service ranked quite high. In fact, Apple tech support successfully solved customer’s problems in more than 80% of the cases reported during the last year, the highest success ratio in the business.
Specifically, Apple scored 83 out of 100 for its tech support of laptops, and 81 out of 100 for desktop support. Other big-name PC manufacturers didn’t do nearly as well, including Hewlett-Packard, Dell and Sony. For example, Dell’s customer service rated 60 on laptop computers (compared to Apple’s 83).
Companies like Hewlett-Packard and Compaq scored the lowest among the major computer manufacturers, with Compaq scoring an abysmal 47 points for its tech support of desktop computers.
Although Apple computers are generally more expensive than their PC counterparts, the consumer reports survey (and others like it) lend credence to the idea that Mac computers are worth the extra money. Especially when you consider that the instance of computer viruses for Apple computers is very low, and that all new Macs come bundled with a variety of useful and easy to use software applications, so that the purchaser can get started right away, without the need to download drivers, uninstall “bloatware” or other hassles.
Sales-wise, Macs have been steadily gaining on PCs for the last five years. The success of Apple’s “I’m a Mac” commercials have contributed greatly to Apple’s reputation as the more reliable, practical and fashionable computer.
The “Cult of Mac” seems unstoppable at the moment, with more and more Windows users “defecting” to Mac all the time, leaving some critics to speculate that Apple will eventually overtake Windows as the dominant computing platform. Granted, this could take years — but if current trends continue, we may all be joining the “Cult of Mac” before too long.
A UN Internet summit with delegates from 175 different countries recently concluded in Geneva Switzerland. The summit concluded that the Internet should be expanded to include the millions of people around the world who currently have limited or nonexistent access to the online world.
The BBC News web site is reporting that the delegates emphasized the importance of alerting governments to the opportunity of expanding Internet technology into all continents, and shrinking the so-called “technology gap” between wealthy and poor countries. However, the final report issued by the summit did not include an allocation of funds to bankroll this expansion, as some delegates had demanded.
Swiss President Pascal Couchepin hosted the event and said in a statement, “the summit has placed a new subject on the international agenda,” referring to the importance of decreasing the technology gap and expanding Internet use into poor nations around the world.
This was the first world summit to take place focusing upon the “information society.” Other than expanded Internet access, the delegates also examined the effects of cell phones and mobile Internet technology. The three-day summit’s final declaration set a goal of the Internet reaching 50% of the world’s population by 2015. However, no specific measures were laid out, or funding provided to achieve this goal.
Basically, the summit was little more than a “photo op” with the potential to expand awareness, but without the bureaucratic teeth or funding to set any realistic plan of action to work. Some delegates were left unimpressed by the outcome, failing to see agreement among the major powers on basic issues such as funding for expanding the Internet to developing nations, and Internet governance that would oversee fairness and ensure a level playing field online.
But other delegates at least conceded that the summit achieved its goal of producing a general statement of principle concerning the online world. As an awareness raising event, the UN summit could certainly be seen as a success, even if no concrete measures were produced to bring about the expansion of the Internet.
Western countries often forget that most of the world is not online. It can be easy to overlook this fact when you consider the rapid growth over the past 10 years of Internet access within the wealthy industrial nations. At times it seems that everyone and his dog has Internet access — and probably even a blog.
But the reality is that millions of people around the world have no access to the Internet, or at best, very limited access, creating an ever widening technology gap between the haves and have-nots.
If nothing else, the UN information society summit should at least draw attention to the critical matter of providing access to the online world for all citizens of all nations.
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There has long been speculation among Internet experts and online marketers that Google is becoming a monopoly on line. The company’s most famous product, the Google search engine, has dominated the online search world for years now, buying up competitors or in some cases simply regulating them to “D list” status. Even the mammoth yahoo.com continues to lose search engine ground to the Mountain View California-based Google, Inc.
Advertising revenues from Google’s AdSense and AdWords programs continue to grow well beyond expectations. For example, Google’s third-quarter profits in 2007 soared by a stunning 46%, raising Google’s stock price over $100 in the past month alone. Google’s total earnings for the third quarter were $1.07 billion. Compare this figure to last year’s third-quarter earnings of 733 million dollars.
But with its closest competitors so far behind in both the search engines and online advertising categories, could Google be approaching monopoly status? Online marketers, in particular, already claim that Google controls too much Internet “real estate,” and has effectively squeezed competitors out of the market.
Of course, the question of whether Google is too big or not largely depends on your point of view. For example, online publishers and advertisers that are profiting from Google’s growth and expanding advertising network would likely have no problem with Google’s size. But smaller startups, competing search engines and online media companies find that, more and more, the Internet is becoming a one lane highway, and that lane belongs to Google.
Already there is a backlash online to the “Googlization” of the Internet, and despite the company’s rising stock prices, there seems no shortage of competitors willing to wade into the search market waters. Online advertising is another area where Google appears vulnerable. Several new start ups are focusing on specific segments of the market and one new online advertising solution caters entirely to the burgeoning EU market, an area where Google is not “untouchable.” At least not yet…
But as Google, Inc. continues to roll out new products, such as Google Apps, Gmail, Google calendar, Google Desktop and Google News, the Big Brother comparisons begin to have more credibility. Google’s recent acquisition of youtube.com, for example has placed the company on the wrong side of many Hollywood media moguls. The company is currently embroiled in several billion-dollar lawsuits regarding the use of copyrighted material on Youtube.
The outcome of these trials, and the resulting publicity could have a great effect on Google’s future. Will they be able to continue their domination of both online search and advertising? Many experts are skeptical. No matter how unassailable Google appears today, it is unlikely that they can continue their current rate of meteoric growth without encountering serious competition in one or more areas of their current online “monopoly.”
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