MAY 2008 W4 ALERT
Microsoft Media Mania
Company embraces open standards, tells Yahoo "Let's just be friends," and is subject to new EU investigation
<Washington Post/Reuters><May 22, 2008>Microsoft spent a very busy week in the news with several reports on several topics that represent potentially significant impact on the company.
*Let’s just be friends*
Several reports surfaced this week suggesting that Steve Ballmer is no longer interested in buying Yahoo…just in cutting a mutually beneficial deal. According to Reuters, Steve Ballmer said, “We are not bidding to buy Yahoo.”
Ballmer went on to say, “Yet, we are trying to have discussions about deals with Yahoo that might create value, but not a whole acquisition of the company.” Several previous reports had indicated that Ballmer had been squeamish about an outright purchase of the industry’s second largest search engine company and that this had led to the deal falling through.
Reuters quotes an unnamed source as saying that the company has re-approached Yahoo with a proposal to buy their search engine business and to further take a minority interest in Yahoo’s other web businesses.
Were Microsoft –who had been late to the Internet party – to be successful with a bid such as this…it would create a powerful competitor to Google, the 800-pound gorilla in the Internet search and advertising business.
*Can’t we all just get along?*
Microsoft also announced Wednesday that they would alter their top selling Microsoft Office product so that it would work with open standards. Specifically, Office will be altered to work with a popular competitor – Open Document Format (ODF).
Microsoft says that this is all in line with their previous announcement in February that they would change their strategy and promote data interoperability and enhance support for open standards (see Feb08 ALERT “Microsoft: OK We’ll Play Nice.”) But some suggest that this could be due to continued scrutiny from the European Union (EU) (see next section.)
*We’re keeping an eye on you!*
And speaking of the EU…they’re taking this latest Microsoft announcement with a grain of salt. The EU has announced…literally the day after Microsoft’s announcement…that they will investigate if the announcement by Microsoft will in fact give consumers more choice, a key issue in previous disputes with the company.
According to a report in Reuters, the Commission has fined Microsoft a total of $2.4 billion since 2004 for various trade practice violations…including interoperability issues.
In a statement released Thursday, the EU said, “The Commission will investigate whether the announced support of ODF (Open Document Format) in Office leads to better interoperability and allows consumers to process and exchange their documents with the software product of their choice.”