Microsoft Cofounder Paul Allen Thinks That Microsoft Should Be Broken Up
31 replies, posted
[QUOTE]This is an interesting intervention into the discussion about what the next CEO should do with Microsoft MSFT +1.17%. The investment house that manages Paul Allen’s money, including his stake in Microsoft, is suggesting that they, and Allen himself, think that the company should be broken up:
Microsoft’s next chief executive should consider spinning off consumer businesses including search advertising and the Xbox games console, according to the private investment vehicle of Microsoft co-founder Paul Allen.
Mr Allen, who started the company with Bill Gates in 1975 and still holds a $2bn stake, is “intrigued and interested” by forthcoming changes, said Paul Ghaffari, who manages the tech investor’s $15bn fortune.
The specific split that is suggested is:
Speaking at the Financial Times Investment Management Summit in New York, Mr Ghaffari said the overwhelming majority of Microsoft’s earnings were generated by selling software and services to business customers.
[B]“The search business and even Xbox, which has been a very successful product, are detracting from that. We would want them to focus on their best competencies,” he said.[/B]
“My view is there are some parts of that operation they should probably spin out, get rid of, to focus on the enterprise and focus on the cloud.”
There’s also a more basic economic point to be made. There’s no reason at all why a company should live forever nor why it should, necessarily, go into new lines of business. The company is solely a vehicle to increase the wealth of the shareholders, those who own it. The implication of this is that the management of a company should always be thinking about the shareholder interests, not those of the firm itself. Which means that each new product, or even each business line, needs to be considered in the context of whether it increases the shareholders’ wealth or not.
For a company like Microsoft that implies the following. Office, Windows, the enterprise solution part, still throws off vast rivers of cash and it’s expected to continue to do so for a decade or more at least. Which leads to two possible strategies. Firstly, that cash could be reinvested into the business and new products developed. Or, secondly, the cash could simply be returned to shareholders and they then decide where to invest it (or spend it, obviously). But the management decision should, in theory at least, rest upon which of those two decisions will lead to the wealth of the shareholders being increased the most. And there’s good reason to think that simply giving it to the shareholders will.
Thus, as Allen suggests, get rid of those parts that aren’t part of that core and concentrate purely on running that core business as leanly as one can for as long as it lasts.
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[url]http://www.forbes.com/sites/timworstall/2013/11/04/even-paul-allen-thinks-that-microsoft-should-be-broken-up/[/url]
And here I thought he got killed by an axe to the face
Sounds like a pretty bold statement
Really makes sense though
[quote=article] The company is solely a vehicle to increase the wealth of the shareholders, those who own it. The implication of this is that the management of a company should always be thinking about the shareholder interests, not those of the firm itself.[/quote]
Spot on right there.
And allow Google to take over? No thanks.
If it's any company that should be broken up, it's Google.
Someone performed an inception on him.
Windows could break off and take Xbox, Windows Phone and their OS (office as well) with them because I feel they're big enough to do that
[QUOTE=redBadger;42761083]And allow Google to take over? No thanks.
If it's any company that should be broken up, it's Google.[/QUOTE]
... Why?
[QUOTE=Judas;42760657]And here I thought he got killed by an axe to the face[/QUOTE]
Even a douchebag clock that literally slaps his employees is right twice a day.
So we should break up companies Intel and AMD because they make money for their shareholders?
That's a pretty ridiculous statement.
[QUOTE=redBadger;42761083]And allow Google to take over? No thanks.
If it's any company that should be broken up, it's Google.[/QUOTE]
Any reason? Hell, I like how Google does its stuff, I like having one account for lots of things, I like how Android is owned by them, it wouldn't be as used and opened without them, only part I hate is the YouTube design team.
[QUOTE=Intoxicated Spy;42761524]Any reason? Hell, I like how Google does its stuff, I like having one account for lots of things, I like how Android is owned by them, it wouldn't be as used and opened without them, only part I hate is the YouTube design team.[/QUOTE]
Then why split Microsoft when it's the same exact thing?
what would happen if paul allen and steve wasniac were in the same room togather....
[editline]4th November 2013[/editline]
kinda weird he says this now, when wasniac was just saying the other day he'd like to see microsoft,google,and apple come togather to work on improving voice recognition and AI
I'm pretty sure there were once a report made in the last 3 years with the help of Microsoft ex-employees that showed that the competition and bickering between the internal departments of Microsoft both wasted resources, created a hostile climate to work in and slowed down development and work.
That would obviously justify breaking the company up into several subsidiary companies.
[QUOTE=redBadger;42761083]And allow Google to take over? No thanks.
If it's any company that should be broken up, it's Google.[/QUOTE]
The only thing Google owned that should be treated as its own thing is Youtube.
That's literally the only thing that has never really improved under Google's ownership.
And all the smaller companies shall deal in: Foodservice.
[QUOTE=redBadger;42761733]Then why split Microsoft when it's the same exact thing?[/QUOTE]
Microsoft has a monopoly on a lot of the computing industry, Google does not.
[QUOTE=danharibo;42763530]Microsoft has a monopoly on a lot of the computing industry, Google does not.[/QUOTE]
Well the search engine.
After all, when you ask someone to search for something on the internet, isn't your response something similar to: "try googling it."
Although Microsofts competitor service there literally [B]IS[/B] shit, even DuckDuckGo is better than Bing.
[QUOTE=Van-man;42763543]Well the search engine.
After all, when you ask someone to search for something on the internet, isn't your response something similar to: "try googling it."
Although Microsofts competitor service there literally [B]IS[/B] shit, even DuckDuckGo is better than Bing.[/QUOTE]
Even if Google is a popular search engine, there's no penalty for using bing or any other. Unlike computing where you are often forced to use Windows to run another piece of software.
[QUOTE=danharibo;42763565]Even if Google is a popular search engine, there's no penalty for using bing or any other. Unlike computing where you are often forced to use Windows to run another piece of software.[/QUOTE]
The problem is more that often you can't buy a computer without it having Windows pre-installed, and thus also paying for a Windows license.
[QUOTE=Van-man;42763571]The problem is more that often you can't buy a computer without it having Windows pre-installed, and thus also paying for a Windows license.[/QUOTE]
In the EU it's possible to get the license refunded, but the lack of choice overall is a big problem.
[QUOTE=Intoxicated Spy;42761524]Any reason? Hell, I like how Google does its stuff, I like having one account for lots of things, I like how Android is owned by them, it wouldn't be as used and opened without them, only part I hate is the YouTube design team.[/QUOTE]
You don't need a single company to have one account, there's OpenID which allows you to use your one account on a ton of services with only one verification site. (Which can be Google but there are others offering this service.)
[QUOTE=Thomo_UK;42760885]Spot on right there.[/QUOTE]
Why are so many people agreeing with this? The shareholders care for nothing more than money in their own pockets, which can oftentimes be made easily by just selling off stuff. What this article describes is basically what Peter Bright foreshadowed over a month ago: [url]http://arstechnica.com/information-technology/2013/10/microsoft-investors-call-for-bill-gates-to-step-down-as-microsoft-chairman/[/url]
What the article is suggesting is basically selling off all the projects that aren't making money [I]right now[/I], and continue to ride the wave of enterprise sales for as long as that might be doable. This isn't in any way good for consumers, as we'll end up with fewer alternatives and one innovative company less. The Microsoft research team does some fantastic shit as well, but many of them won't be feasible for a very long time, which isn't in the interest of a shareholder. Breaking up Microsoft will just lead to lay-offs and less cool shit.
And why is Valve such a great company? Because they don't have any shareholders to tell them what they have to do. Microsoft has shareholders, yes, but Steve Ballmer is at least passionate about the company itself, and that is in my opinion infinitely better than a company just dancing to the shareholders' tune.
[QUOTE=Intoxicated Spy;42761524]Any reason? Hell, I like how Google does its stuff, I like having one account for lots of things, I like how Android is owned by them, it wouldn't be as used and opened without them, only part I hate is the YouTube design team.[/QUOTE]
And what's the difference between them and MS? Apart from google actually being technically a lot more scary due to having a lot more services which people plonk information into.
Honestly MS was virtually almost broken up for the past decade and it was the worst thing that could have ever happened to them. They weren't able to integrate anything and essentially had islands in the void as opposed to a continent so to speak.
[QUOTE=GoDong-DK;42768128] This isn't in any way good for consumers, as we'll end up with fewer alternatives and one innovative company less. The Microsoft research team does some fantastic shit as well, but many of them won't be feasible for a very long time, which isn't in the interest of a shareholder. Breaking up Microsoft will just lead to lay-offs and less cool shit. [/QUOTE]
You can do all the R&D in the world and it won't help you if you don't get that stuff into anyone's hands.
I don't know if I'm reading this incorrectly, but he's not calling for a government breakup of Microsoft. He's saying it is in the best interest of the shareholders for Microsoft to break up itself.
If I read this right then there's no connection here with anything to do with monopolies.
[QUOTE=danharibo;42763530]Microsoft has a monopoly on a lot of the computing industry, Google does not.[/QUOTE]
Search
internet ad services
video hosting
internet mapping
Should I go on? Keep in mind one important thing though. Monopolies are two way as opposed to one way.
You are often essentially forced to be a google customer in order to promote a lot of stuff. And google customers aren't the people searching, but the people who are buying ad ranks, rank spaces and similar. Those are google customers and to them, there's many negative reasons if they don't use google.
It's important to make this distinction, due to the fact that MS and google have distinctly different customer bases.
Ms makes money from people using a service and having those as customers
Google makes money of of people using a service for free and having a third party as a customer.
On the Google topic, Google's going to end up being a powerhouse of unparalleled scale. The ISPs as they've traditionally existed are going to cease to exist, because they refuse to even try to compete with Google. Hence why you have Time Warner saying that their customers are satisfied with 2nd world internet service and why 1GBPS and better speeds aren't necessary. They're trying to spindoctor reality as Google marches on their asses.
[QUOTE=wraithcat;42768201]Search
internet ad services
video hosting
internet mapping
Should I go on? Keep in mind one important thing though. Monopolies are two way as opposed to one way.
You are often essentially forced to be a google customer in order to promote a lot of stuff. And google customers aren't the people searching, but the people who are buying ad ranks, rank spaces and similar. Those are google customers and to them, there's many negative reasons if they don't use google.
It's important to make this distinction, due to the fact that MS and google have distinctly different customer bases.
Ms makes money from people using a service and having those as customers
Google makes money of of people using a service for free and having a third party as a customer.[/QUOTE]
There's nothing forcing you to use Google for those services, there are alternatives that can do the exact same for you. That's quite different from software that only works on Windows.
[QUOTE=Medevila;42768695]To provide for competition and prevent a monopoly[/QUOTE]
See, the issue with Google is that they're reaching out and expanding where everyone else refuses to. They aren't blocking competition. Those they'd be competing with are dropping the ball.
[QUOTE=danharibo;42768338]There's nothing forcing you to use Google for those services, there are alternatives that can do the exact same for you. That's quite different from software that only works on Windows.[/QUOTE]
The same argument could be made for OSx or Linux - both these operating systems have software which no other OS has. In fact, I'd say that the lockin from google is actually greater.
Again, keep in mind that the thing google has a monopoly on is it's users. Which in truth are it;s monetised product. The majority of users use their services. Which essentially does make it one of the only possible places for their actual customers.
A monopoly doesn't have to be absolutely, merely large enough. And I'd wager google does have that.
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