Sunday, February 10, 2008

Microsoft's Yahoo! Acquisition is Bold. And Dumb.

Please, Yahoo!: fight to stay independent. Or at least tear yourself apart and pop a couple of poison pills to go out on your own terms before this goes much further. Yeah, I've got your double-suck cake for you: one layer Yahoo!, one layer Microsoft.

I was on the internal Microsoftie bandwagon that Steve Ballmer was steering not too long ago that an acquisition of Yahoo! didn't make sense for Microsoft. So when the unsolicited offer went through, I was like a whole bunch of other confused senior people looking around trying to figure out what changed and why this suddenly was the right thing to do and to bet the company on.

I recognize that huge change for the future is typically greeted with 95% critical negativity. People don't like to change and huge change is an immense leadership challenge, especially when the change is the right thing to do and very few can see that perspective. So I've done my best to be open and accept that Yahoo!'s acquisition by Microsoft is a good strategic move for Microsoft, for our customer's, for Yahoo!'s customers, the shareholders, and for Internet users in general.

I haven't gotten there.

In fact, this still seems like a real dumb idea, like a staggering drunk trying to prop himself on an unwilling and lame adversary who wouldn't mind seeing the drunk facedown on the pavement. The only arguments that are half appealing are those that suppose there's going to be a $110,000,000,000USD annual online ad-market, and Microsoft + Yahoo! gets a third of that market. Hand-waving, "The acquisition pays for itself!" Yeah, okay, give me that dream and a milkshake and at least I get to enjoy the milkshake.

Some interesting posts on this:

Of course there's one big thing I haven't touched on: headcount. Let's see, why did I start this blog? Oh, yes: Microsoft has become way too huge to be effective and nimble in the creation of focused, passion-driven software. Fourteen-thousand or so demoralized people thrown on the heap does not help in the least. That's the amount we need to go down, not up. What is this, Bizarro Microsoft?

Have you brought up HeadTrax recently to see how many positions report up to the top? Give it a go. And how many people report to the various presidents. Any surprises?

Microsoft absorbing Yahoo! doesn't make sense to me given the extreme overlap in offerings that neither Microsoft nor Yahoo! have been terribly effective at. How many success stories have there been lately at Yahoo!? I like their portal. I use their search on occasion (only when Live Search and Google give me disappointing results). And their acquisition of flickr was really good for them, along with not screwing flickr up (and flickr users, you gotta know Microsoft would be pretty hands-off of flickr, other than probably putting a Live ID sign-in bar or such on there).

The only argument I've heard that makes sense from a conspiratorial Machiavellian kind of angle is that this is an opportunistic move to bust and cripple the already lame business adversary we have in Yahoo! We don't really want Yahoo!, but rather see this as an opportunity to kneecap and sideline them, pointing out their vulnerability to acquisition and angering their frustrated shareholders into revolt, all while putting them under the microscope of the analysts, pointing out their various failed and marginal ventures. And some glimmers of potential. But mostly, Yahoo! continues to come up in an unflattering light as people scratch their head as to how they'd help Microsoft at all.

If the acquisition doesn't go through, Yahoo! certainly emerges with several broken bones and bruises. Rebuilding from that will be a struggle that will require drastic and draconian decision making.

And the MSN, search, and ads folk at Microsoft certainly shouldn't be too proud right now, because you guys are under as much scrutiny as Yahoo!. Why are we proposing blowing $22,000,000,000USD in cash and going into debt? Because Yahoo! has something done right - relative to us, according to our leadership - that you haven't been able to do. Is there a Microsoft online-services leadership shake-up coming? One can hope. The fact that we've initiated this acquisition, for whatever reason, means that the people in charge haven't been able to deliver and are not on a path to deliver. Accountability?

I do want to see the strategic importance in this huge, complicated take-over. I do want to believe. If this all about ads and the acquisition goes forward I need the influentials in Microsoft leadership to connect with me and convince me to believe that this is indeed the next important foundation for Microsoft. To tell you the truth, if you had pulled me aside when I was in school, holding court in the computer science lab, and whispered in my ear ala The Graduate: "online ads..." I would have laughed my geek butt off.

So Google gets to have the joke on me, but for us to bet the company and build Microsoft's future foundation on ads revenue? WTF? As someone who considers themselves a citizen, not a consumer, I want to create software experiences that make people's lives delightful and better, not that sells them crap they don't need while putting them deeper into debt. I'm going to be in purgatory long enough as is.

Yes, okay, we should have a team do an advertising platform and do it well, but the money chest can be better invested across the company, let alone avoiding going into debt and putting us on another spiral of doubt and angst in the stock market, all while dealing with anti-trust maneuvering in Europe.

The attempt to acquire Yahoo! is a bold move. But bold and dumb are not exclusive. Q.E.D.


146 comments:

Anonymous said...

The past eight years of SteveB as CEO was just noise leading up to this Yahoo deal. I wonder if we're quickly heading to the true tipping point of the company.

The deal(regardless of outcome) will usher in a new dumber age for Microsoft or a bolder richer one.

We'll know quickly which one it will be.

Anonymous said...

I worry about what a Microsoft/Yahoo company would do to the salaries of Yahoo's developers. My ex-girlfriend, who has about 10 years experience as a developer, took a job at Microsoft last year for about 80K and I have heard stories of others who have been given very low offers or have seen very little salary growth at Microsoft.

Anonymous said...

Right reason to acquire Yahoo:
to add to an already successful add and online services business. Microsoft so far does not fulfill the drill.

Wrong reason to acquire Yahoo:
to save an incompetent leadership from its own failure to succeed (like Google)in the add and online services business. This looks more like the real reason, which only proves it is the wrong reason.

Anonymous said...

I worry about what a Microsoft/Yahoo company would do to the salaries of Yahoo's developers. My ex-girlfriend, who has about 10 years experience as a developer, took a job at Microsoft last year for about 80K and I have heard stories of others who have been given very low offers or have seen very little salary growth at Microsoft.

I can't think of any strong 10-year veteran developer that we'd bring-on for 80k -- that's basically what we offer college grads.

Does she have a degree? What does her resume look like? What kind of background does she have?

A strong 10-year veteran developer, with a CS-related degree and a strong job history would likely be coming in somewhere in the 120+ range (63/64), with top candidates probably pulling considerably more based on niche talent.

Anonymous said...

The deal has to be about aggregating traffic and improving the value extracted from MSN's own traffic (today's and that in the future, if you believe ad-funded apps). It's probably also about getting some people who know WTF they're doing in the online services space.

Valuation aside for now, I think it is a MUST DO for MSFT and now it is for YHOO as well. I haven't sharpened my pencil and done the math, but it will probably be fairly easy to justify. We'll find out in a few years' time whether the value above and beyond what was paid is actually realized.

I sold all my MSFT stock and poured it into YHOO last week. Unless you have tax issues to deal with, it seemed pretty compelling since YHOO is trading at a discount to the MSFT offer. It is unlikely to be worse than holding MSFT stock.

Anonymous said...

re: MSFT taking on debt, people need to separate the two concerns.

The first concern is really about whether the acquisition makes business sense; the second concern is how MSFT should finance it.

On the latter (putting aside the former), MSFT should use up much of its cash on hand (some buffer and keep some for working capital) and issue debt to cover the rest. MSFT has to be a triple-A credit--it's generating so much free cash flow, it isn't much of a worry to lenders (and I doubt MSFT won't be issuing 30 year corporate bonds) and MSFT shareholders should get a better Total Shareholder Return (TSR). Incidentally, it should force MSFT to be more fiscally disciplined--which it has lacked and continues to lack, though it's improved since putting in the new CFO.

Hey, maybe Yahoo's Sue Decker will stay on board--that might be a nice injection of experienced management into the MSN/PSD org.

Anonymous said...

What are a lot of you complaining about?

You wanted Kevin Johnson in charge of the company and now he is.Be careful what you wish for.

Anonymous said...

Henry Blodget's piece, "Microsoft's Colossal Strategic Mistake: 'We Need to Be in Advertising'", February 9, 2008, is particularly compelling.

http://www.alleyinsider.com/2008/2/microsoft yahoo will be our google apps

"Corporate applications will never be supported by advertising, and if Google really wants to unseat Microsoft's Office monopoly, it will have to build up the same sort of corporate sales and service organization that Microsoft already has. Microsoft should stop trying to go into a business it doesn't have to be in--advertising-supported consumer media--and concentrate on protecting the core corporate business it already rules--by committing wholeheartedly to Office Live.

One big step toward doing this? Radically changing the Yahoo deal. Microsoft should merge its Internet advertising assets with Yahoo in a much smarter Yahoo transaction--and then invest $5 billion in building out a global cloud computing platform to support Office Live."

Read the whole thing. Nobody should support the Yahoo! offer without being able to answer Blodget's cogent argument.

Anonymous said...

Now that the press is reporting that Y! is going to refuse the offer because it's too low... what will happen now? Will we offer more? Or walk away? This is turning out to be a disaster. A lose-lose "Fargo" of a deal. SteveB needs to be ousted.

Anonymous said...

I can't think of any strong 10-year veteran developer that we'd bring-on for 80k -- that's basically what we offer college grads.

Well, when you come to US on H1B you are at their mercy. I can speak of myself and about 10 friends. 5 to 7 years experience -> lvl 59 with 70k a few years ago. You do not get to negociate, is a take it or leave it deal.

Anonymous said...

Mini, I agreed with you up until this point:

> "but for us to bet the company and build Microsoft's future foundation on ads revenue? WTF? ... I want to create software experiences that make people's lives delightful and better, not that sells them crap they don't need while putting them deeper into debt."

I think you need to rethink your perception of ads a bit. First, who says Windows makes people's lives better but ads don't? Sometimes people really are looking to buy things, and the ad links (if they're relevant) help them find what they're looking for faster.

Second, your "putting people deeper into debt" comment is an exaggeration, or at least doesn't add anything to your argument. Buying software puts people into debt too. And it's silly to imply that MS shouldn't sell advertising because it might increase consumer debt.

Anonymous said...

A strong 10-year veteran developer, with a CS-related degree and a strong job history would likely be coming in somewhere in the 120+ range (63/64), with top candidates probably pulling considerably more based on niche talent.

Wow, really? I guess I'm a walking idiot then. 15yrs exp, 8.5 here at MSFT. I came in a 60 and I am now a 62. I just broke 100K last review cycle. I can't stand the "career management" that gets shoved down my throat twice a year. Another freaking check list and waste of time better spent doing my job (and I do it damn well, thank you very much).

It amazes me that shipping product successfully is just not what works here at all anymore. When I am busting ass to get a feature done I just can't seem to care about how "visible" I am to upper management. When I am working with the team to wrap up shipping the last thing I am worrying about is my "cross divisional impact". And yet, at the end of the day that seems to be all that matters.

Anonymous said...

We all hope that this deal doesn't go ahead but the truth is some serious damage has already been done.
1. Stock. Y! 47% up after offer got public, MS? well you know.
2. Message sent to the industry. There is not a single credible media who hasn't interpreted this as an open acknowledgment that our online strategy is a flaw and we cannot compete.
3. Message to our employees. Specially working on the MSN/WL space. Since you guys suck and what you are delivering is shit, lets see if we can get it from someone else. For the rest of us, the message is the same as the industry.

Really, what Ballmer needs to do to lose his job?
It's time not only to sell but to leave before we all sink.

Anonymous said...

A strong 10-year veteran developer, with a CS-related degree and a strong job history would likely be coming in somewhere in the 120+ range (63/64)

In 7 years in Windows, I have seen this happen only once and the guy eventually had to transtion to a PM position. More MSN level inflation?

Anonymous said...

Wow, really? I guess I'm a walking idiot then. 15yrs exp, 8.5 here at MSFT.

I agree with the last poster. I joined as a L60 SDE in 2000 and am at L62 now making less than 100K. Worse a new hire joined my team at L60 and is making 94K. So much for the 8 yrs of experience in Microsoft.

Anonymous said...

"Well, when you come to US on H1B you are at their mercy. I can speak of myself and about 10 friends. 5 to 7 years experience -> lvl 59 with 70k a few years ago. You do not get to negociate, is a take it or leave it deal."

I know several people that in similar situation got offered L61 few years ago.

I don't get how much that is H1B related? If company goes through hassle of offering someone H1B, they do want that person.

quux said...

What I wonder is: if MS wants to gain enough eyeballs to look like a viable Google competitor in the ad space, why not go after them the old fashioned way- with advertising?

Think print, radio, TV. Think what a mere $5 billion spent on a smart campaign could accomplish.

Does MS really need to spend $40B, plus another who knows how much (not just money but morale and confusion) to weld Yahoo on top of MSN/Live ... which already has most of the functionality Yahoo has?

Anonymous said...

Over here from the Yahoo! side of the fence we don't want this deal either. The problem at this point is that because of the way your glorious leader came barging in, we are F*'ed!

There are only really 3 scenarios left at this point:

1. MonkeyBoy refuses to raise the offer and walks away. Probably the best option for you guys, but we are F*'ed. The stock will tank and we will be dealing with shareholder lawsuits 'til the end of time.

2. MonkeyBoy goes all out hostile and replaces the board and forces the deal through at $31. This will drag the whole thing out longer, and there will be no assistance from the Yahoo side getting past the regulatory hurdle. The uncertainty and all-out hostility between the two companies will leave us both F*'ed.

3. MonkeyBoy raises the price slightly and we end up with a "friendly" takeover. The Yahoo board can take a bit of credit for getting more value for shareholders and the Yahoo employees can take some solace in the fact that our options are worth a bit more. Of course, then the choppers carrying the stormtroppers from Redmond will start arriving. Be careful, our neighbor, Lockheed-Martin, is well-armed. There won't be a parade waiting for you guys. Just long lines at the laser printers waiting for our resumes to print and wondering how long we need to stay with the boondoggle before our few above-water options vest. Again, both companies are F*'ed.

Thanks guys. That's why we love you guys so.

Anonymous said...

New blog post topic for you Mini

http://money.cnn.com/magazines/fortune/bestcompanies/2008/full_list/index.html

Microsoft drops from 50 to 86 in a year. Almost one year back Lisa had posted on the InsideMS blog on how Microsoft dropping from 42 to 50 in 2007 was not good and what she would do about it. An year has passed by and there are no comments now from Lisa on what she feels about Microsoft's current position in the list. So much for executive accountability. Guess next year Microsoft might not be in the list

Anonymous said...

The deal doesn't make much sense to most Microsoft employees. Combining the force of two losers won't beat Google. Yahoo's search market share is shrinking fast. In a few months, their share will below 20%. Their search technology is not much better than Microsoft. We shouldn't pay a premier for this.
If you talk about display ads, which is as big a market as paid search, Microsoft is not bad positioned with aQuantive acquisition. We really don't need Yahoo to win the display ads war.
$44.5 B is a huge sum, even the annual interest is in billions. I would rather to use this money to buy more nimble web 2.0 companies( and can buy thousands of them).
I just don't see how to merge two slow elephones together. It will only be slower. We should stay away from this deal.

Anonymous said...

The level 62 1.0 Compa should be about 99K, someone who's an actual manager should be able to confirm

you can estimate about 10% deviation between levels from there

Anonymous said...

Leave it to SteveB to kill our momentum again and drop the stock below $29 - thanks so much. At least Yahoo's board is rejecting the offer.

Our best move is to now walk away. The reaction from all the hedgers will be to drop Yahoo and it will tank further. The result - Yahoo is damaged further, Google has freaked out, and hopefully our stock bounces back.

Anonymous said...

Or for another very different take on the deal, check out Cringely: (http://www.pbs.org/cringely/pulpit/2008/pulpit_20080208_004240.html)

Anonymous said...

Sometimes I think Scott Adams is a Microsoft employee:

http://dilbert.com/comics/dilbert/archive/images/dilbert2008026112009.gif

In just one cartoon strip, he captures the essence of all Microsoft failures of the past decade.

Anonymous said...

I am appalled by the frenzy various folks on this blog (including mini) have worked themselves into.

This acquisition makes perfect sense! From a technical perspective MSN has been trying for 10 years to get a strong foothold in online space and look where they stand. The head of the live/msn/whatever search exclaims "our technology is better!" Ok, Einstein where is the beef?

From a market perspective MS/Y! gets the eyball and perhaps proven technology. So let's shake up some things around here.

Financially, 31 dollars is a bargain. Actually it was rumored that last year we were willing to pay 43 dollars, but who knows.

In the words of Chris Liddell this is the only way to grow and we shouldnt be embarrassed by it.

Alright I have my asbestos suit on, flame away!

Anonymous said...

I'm not sure where all of these strong Devs with 8+ years experience and who are still stuck at level 60 -- or who were suckered into accepting an offer at level 59 -- exactly are at the company...

As a 10-year veteran hiring manager first in Dev Div, then Windows, MSN and now Xbox, I can honestly say that I've never seen such low salaries as people are reporting here with the exception of some self-taught Devs who came up through the ranks without formal training and have topped-out at 59 or 60... and I've certainly have never hired any strong external Dev candidates with 8+ years of industry experience (with relevant degrees and strong work history) at such low levels and for such little money. I'd be laughed out of the offer, frankly.

Why on earth would anyone with nearly a decade of development experience who had a good resume come to work at MSFT for 80k a year? It makes no sense.

Hmm. Now I'm *really* curious about the quality of people posting on Mini's blog...

Anonymous said...

"Wow, really? I guess I'm a walking idiot then. 15yrs exp, 8.5 here at MSFT. I came in a 60 and I am now a 62. I just broke 100K last review cycle."

Dude, I really don't mean to be harsh... but if you've only been promoted twice in 8.5 years and you have 15 years of experience in the industry, there are *only* two choices:

1. You're not a very good Dev. If you were a great Dev, you would either be doing much better than you are at Microsoft, or you would have left the company years ago when it became obvious that you were being criminally undervalued.

2. You're a masochist and despite the fact that Microsoft has been basically telling you that you're not so great by the lack of promotions, you've chosen to stay.

Everyone good Dev I know at the company is doing far better than you are, and the good Devs I know who weren't doing better left after just a couple of years when it became obvious the fit wasn't very good.

I would say your choices are to either accept the fact that you're not as good as you think you are and therefore that's why you're making chicken scratch after 15 years, or it's time to wake-up and leave the company and go somewhere that will pay you what you're worth.

Anonymous said...

"When I am busting ass to get a feature done I just can't seem to care about how "visible" I am to upper management."

Amen. You summed up my feelings exactly.

This Yahoo deal is retarded. Ballmer should be fired for this idiocy. I've been here for 11 years and seen things go from good to shit. It amazes me that we still make money, but it has to end sooner or later.

I just hope to hang on a couple more years to collect some stock awards and then I'm on to bigger/better things.

Anonymous said...

CFO Chris Liddell is profiled in the New York Times as the architect of the Yahoo! deal:

http://www.nytimes.com/2008/02/11/technology/11dealx.html

"You have to be disciplined and ruthless", says Liddell. The article makes MSFT leadership sound clumsy, heavy-handed and clueless.

Anonymous said...

LisaB's job was never to make MS a better place to work, it was to quell dissent. Thru a bunch of smoke and mirrors (hey we'll give you back towels!) she's somewhat succeeded.

All while getting to sell those $28 options that expired for the rest of the rank and file earlier in 2007

Anonymous said...

I'm in OSB and I just don't see the point. The things we do moderately well, so do they (portal, mail, chat, news). We both do search and maps fairly well (now), but not better than G, much less well enough to switch anyone. The things we suck at (ad center, social), they suck at. I don't see synergy, just an expensive grab at overlap and some diminishing search share.

MS' core strength is its sales and service for enterprise. As Vista and Office 2007 show, the quality of the software really doesn't matter, and we will still make a mint. Success at things like Sharepoint and Server-n-Tools brings this home all the more: it doesn't have to be good, just good enough for our excellent enterprise pipeline to start printing money. We've shown we can make very small, painful successes eventually (Msn, Xbox), but more often aren't going anywhere without the established enterprise pipeline to prop up our effluvia (Mobile, Live, Zune).

I just don't see how billions for Yahoo changes any of that. I like them, but they won't alter MS an iota and will never make the money back. Ad-driven software is huge and getting bigger, we can all see. Buy up a million bloggers and put our ads there, start up new online properties for the same, figure out how to sell ads on media centers and games (whatever happened to Massive?), or whatever, but don't blow the company's wad on a surefire money loser.

Anonymous said...

Our best move is to now walk away. The reaction from all the hedgers will be to drop Yahoo and it will tank further. The result - Yahoo is damaged further, Google has freaked out, and hopefully our stock bounces back.

Hey, maybe that was SteveB's intention all along, and he's a freakin' genius instead of a freakin' idiot? Y'think?

Guess we'll see when he responds to the rejection. (I'm not holding my breath for the right response, personally.)

Anonymous said...

"Well, when you come to US on H1B you are at their mercy. I can speak of myself and about 10 friends. 5 to 7 years experience -> lvl 59 with 70k a few years ago. You do not get to negociate, is a take it or leave it deal."

Sorry dude, I call shenanigans. I came a few years ago at lvl 59 with a grand total of 1 year of experience. I've seen promotions rate of 1 every 1.5 years, and all this while I've been on an H1-B. If anything I'd say the culture here is agnostic to whether you're on H1-B or not.

I think the real reason for that lowball offer might have more to do with the quality (or at least perceived quality) of said people.

Anonymous said...

Here is the amusing part. From the letter from SteveB to Yahoo's board:

"Microsoft’s share price has generated shareholder returns of 8% during the last one year period and 28% during the last three year period, significantly outperforming the S&P 500."

Not any more!!!

Anonymous said...

Over here from the Yahoo! side of the fence we don't want this deal either. The problem at this point is that because of the way your glorious leader came barging in, we are F*'ed!

Sobeski, is that you?

Anonymous said...

"Corporate applications will never be supported by advertising, and if Google really wants to unseat Microsoft's Office monopoly, it will have to build up the same sort of corporate sales and service organization that Microsoft already has. Microsoft should stop trying to go into a business it doesn't have to be in--advertising-supported consumer media--and concentrate on protecting the core corporate business it already rules"

That assume's Google's purpose in the productivity space is to make money. Microsoft and Google have similar DNA, and they are both software giants with ridiculous sums of money. They are the only companies that could reasonably threaten one another.

Google could create Office-like applications and give them away for free, not to make money but to destroy a Microsoft cash cow. Google could fund Firefox and push for offline features, not to make money but to remove OS value and attack the other Microsoft cash cow. With a weakened Microsoft, Google has no serious threats with a combination of economic strength and technical ability.

They probably won't get the corporate sales force to make lots of money and take marketshare and profits from Microsoft. But they can get the technology to take marketshare and destroy Microsoft profits.

It's the exact reverse for Microsoft in Google's area of strength. If we get an ad/search platform as effective as Google's, that means there's competition and the price of ads goes down. The profit in the whole industry goes down. They say online advertising will be a 80B business in 2010. How much of that will be profits? If we commoditize Google's ad platform, not much. If we get competitive with Google, the profit will be much less. The only way to take Google's profits is to beat it to the point where Google doesn't even have a competitive marketshare, which I don't think anyone expects.

Anonymous said...

With CFO Liddell in charge of the deal, it's no surprise it doesn't make any sense. It's pretty clear the acquisition is a dream on the CFO's spreadsheet. If you make the right assumptions and put the right numbers in the right boxes, in pencils out beautifully. This is what happens when you put the finance guy in charge and why the future of MSFT hangs in the balance. This guy could be as bad or worse than Ballmer when it comes to making bet-the-company mistakes.

Anonymous said...

Well, when you come to US on H1B you are at their mercy. I can speak of myself and about 10 friends. 5 to 7 years experience -> lvl 59 with 70k a few years ago. You do not get to negociate, is a take it or leave it deal.

Not to be too "harsh" but:

- you didn't need to come to the US
- you didn't have to take the offer
- MSFT - or any company - assumes substantial expense to deal with all the regulatory BS around H1B

MSFT doesn't owe anybody a job, and very frankly, $70K or all the higher salaries discussed hereon in various comments as "low" and so on, are pretty nice for much of the world's population. I realize we have invested a lot in our education, but living in an overpriced area or expecting plasmas and Xbox360s isn't really MSFT's problem, it's yours. If you don't like your salary... work harder and kiss the right asses (sorry, but that's the impression I get about MSFT) or go elsewhere or start your own thing. There are enough talented people in low-cost areas now that many of us will really need to face these unpleasant choices; have you contingency-planned yet? Or are you so good that you don't need to... (and does your mgmt agree)?

More on topic... I make my living using and applying MSFT products. A distracted, suddenly indebted and cash-poor MSFT struggling to integrate tens of thousands of now-depressed employees (Y! + MSFT Live! etc.) makes me think about perhaps becoming expert (as opposed to competent) in competitive tools. I prefer the MSFT tools; so I hope the Y! merger fails and whatever is necessary happens at the MSFT top to get the flab out. A management that can't find better uses for $44B than buy a failing eyeball-play (hello, dot-com is over) must have to justify its existence to the board at some point! Right? Right?

Anonymous said...


I think you need to rethink your perception of ads a bit. First, who says Windows makes people's lives better but ads don't? Sometimes people really are looking to buy things, and the ad links (if they're relevant) help them find what they're looking for faster.

Second, your "putting people deeper into debt" comment is an exaggeration, or at least doesn't add anything to your argument. Buying software puts people into debt too. And it's silly to imply that MS shouldn't sell advertising because it might increase consumer debt.


Here's an idea: Make money by selling ads for Linux. That way you won't be putting the customers in debt. ;-)

Anonymous said...

MSFT:YHOO two weeks ago: $34/$19

MSFT:YHOO on 2/11/2008: $29/$29

If MSFT drops below 20, can GE buy Microsoft? GE might do something good with it.

Anonymous said...

Apparently, MS just announced another acquisition... Danger, the makers of the SideKick phone.

http://www.engadget.com/2008/02/11/microsoft-buys-danger-windows-mobile-sidekick-imminent/

Weird.

What's their intent? To make a phone themselves, and piss off all their partners a la PlaysForSure and Zune?

MSFT behavior just gets more and more bizarre by the day.

Joe said...

Danger Will Robinson!

MSFT to buy Danger, maker of the Sidekick.

http://www.news.com/8301-13860_3-9868954-56.html?tag=nefd.top

Which, when taken together with€ Yahoo\, is awfully interesting.

Bold, even

Anonymous said...

A strong 10-year veteran developer, with a CS-related degree and a strong job history would likely be coming in somewhere in the 120+ range (63/64)

That's not right.

I was a 14+ year veteran developer when I joined MS with extensive experience and after 8 years I have finally broken the 100k mark.

Salaries vary enormously at MS depending strictly on who you know and who's your friend.

Rich Salz said...

How much time will be lost as MSFT rewrites all of Yahoo to be Windows apps? And how much ground will be lost to the competition while that goes on? It's not like hotmail ...

Anonymous said...

"I haven't sharpened my pencil and done the math, but it will probably be fairly easy to justify."

If it was fairly easy to justify, MSFT's marketcap wouldn't be down $40 billion and climbing.

Anonymous said...

I think the real reason for that lowball offer might have more to do with the quality (or at least perceived quality) of said people.

And here I was thinking this was because people in the US understand that negotiating a job offer is like buying a used car. Which means those from other countries would be at a natural disadvantage.

Taking the analogy further, the counterexamples are equivalent to lucking out by happening to shop at a no-haggle dealership.

Anonymous said...

Microsoft to buy Danger

http://www.news.com/8301-13860_3-9868954-56.html?tag=nefd.lede

Sounds like Windows Mobile is not good enough or what? Or is MS trying to muscle in to the consumer space which Windows Mobile is not? It would be interesting how the politics work out with two different Mobile OSes to support and integrate. Or will Danger be folded into Windows Mobile (or vice versa)? My understanding is Danger sells its own hardware. Will MS be going the same route ala Zune?

Anonymous said...

Hey, look at the bright side:
1.) Yahoo and the market are now deluded into thinking that Yahoo is worth a lot more than it is. They don't need a poison pill, we just gave them one, we priced them far out of reach of any of our competitors. Hmm, similar to what we did with Facebook, think about it...
2.) Yahoo's bloated stock is now a great short opportunity. Short it! Free money!! (unless someone comes along and offers more ... which is not likely)
3.) Microsoft stock is now nice and affordable. Buy it!!! it might never be this low again, and it'll pop back up after this blows over. Free money!!
I enjoy all the whining, but take a chill pill, call your broker and profit from this move.
All that actually happened was that we made an offer.
Surely our senior leadership knew it would be rejected.
Surely they anticipated what would happen to our stock price and Yahoo's stock price.
Surely they were motivated by a strategy that is not quite obvious to everyone now, but will make sense in hindsight.
You don't make a 42 billion dollar offer on a whim, there are some nice side effects from the offer that we did not have to spend any money on.
I might just be the best money we never spent.

Anonymous said...

There's the first head to roll:

http://valleywag.com/354851/microsoft-demotes-poached-askcom-ceo

Please walk away from this deal Steve! I want to believe in my company once again.

Anonymous said...

"Microsoft’s share price has generated shareholder returns of 8% during the last one year period and 28% during the last three year period, significantly outperforming the S&P 500."

Really? And what three-year period would he being referring to? Please find me a 3-year period anywhere in the last 3 years where MSFT has outperformed the S&P500. Even if you take our peak (Nov. 2, '07) and go back 3 years, we still didn't outperform the S&P500.

If Ballmer truly wrote that then that's proof he is an idiot.

jon said...

I do want to see the strategic importance in this huge, complicated take-over. I do want to believe. If ... the acquisition goes forward I need the influentials in Microsoft leadership to connect with me and convince me to believe that this is indeed the next important foundation for Microsoft.

Totally agreed. And presumably the logic they'd use to convince employees would also help with the press, analysts, investors -- and Yahoo!

Of course I cut out a few words there ... Mini had originally written "If this is all about ads ..." and then went on to say "but for us to bet the company and build Microsoft's future foundation on ads revenue? WTF?" I think this is oversimplifying in a couple of ways.

First of all, Yahoo! is fundamentally a media company (that just happens to monetize primarily via advertising). If Microsoft's serious about competing with consumers -- online, with XBox and Zune, and increasingly with operating systems -- it needs to get a lot more of this perspective. Yahoo!'s the most technology-focused of any large media company; unless Microsoft wants to retreat to the enterprise, it's hard to pick a better partner.

Secondly, advertising is only one of the potential revenue models: subscriptions and micropayments are also extremely plausible. Yahoo!s offerings including their portal, Messenger, Flickr, Y! Answers all have a lot of possibilities with any of these models -- and with Zune taking the lead on MS Points, Microsoft has some really technologies in micropayments.

Third, at least for the time being the advertising market is huge and extremely profitable; and unless you want Microsoft to give up on one of the few multi-billion dollar spaces it's got a shot of expanding into, you need to look at how this fits in. One significant thing about the aQuantive acquisition was that their agency portfolio; this is a great try at a flanking maneuver with Google, and Yahoo!'s media presence is like gold from that perspective. In addition, the dynamics of the search keyword market in particular mean that there is a virtuous cycle as your market share increases: additional high-quality inventory attracts more advertisers who bid up the value of keywords. This is one of the very few options Microsoft has for buying eyeballs. [The same is likely to be true for messenger, mail, and photos as people get better at monetizing them.] Also, this shores Microsoft up in the display ad space, which is likely to come under pressure as Google integrates DoubleClick.

Which isn't to say I think the deal's a no-brainer; I've been busy with other things, and so am still where I was before: initial reaction positive (although high-risk) if things had gone through at the initial offering price. As it is, we shall see ...

Still, I think it's important to be analyzing it taking these strategic perspectives and the online business models into account.

jon

Anonymous said...

As a former GE person, I reckon GE would do very good things for Microsoft. You have to remember they have a focus on every division returning a profit though, so some divisions might be culled in a purchase.

Their other great focuses are double-digit annual growth (always kept hearing that one) and process re-engineering (good old Six Sigma).

The staff review processes might be better than you're used to as well.

There's probably a negative here, but I can't see it offhand.

Anonymous said...

Much smaller deal, but apparently Microsoft has acquired Danger, a small company in CA that makes the operating system for the Sidekick phone that enjoys a very loyal and enthusiastic fan base. If you haven't used a Sidekick, it's actually very easy and fun to use.

Unfortunately this leaves Microsoft with two incompatible phone operating systems. Windows Mobile has momentum and broad, if lackluster, support from phone vendors, internal groups, software vendors, and corporate customers. I can't see it getting killed off to be replaced by Danger.

This means the new Danger "group" will either be left alone and will continue to function as they always have--not likely, why would we have acquired them in that case--or they will be asked to port their popular user interface piecemeal to the arguably inferior Windows Mobile OS. This is the most likely possibility and I assume the result will be kludgey and unpopular.

So, "thanks" Microsoft, for killing a product that many people love.

Anonymous said...

CFO Liddell should go. This company is in serious trouble now. Draining the 21B cash will put this company in great risk should there be any stragetic mistake. Liddel knows nothing about the software industry. Ballmer, wake up!!! Fire Liddell!!!

Anonymous said...

Wow, are you people serious with the salaries? 80K! I know technical writers with 5 years+ experience in the Valley who make more.

Anonymous said...

Read the whole thing. Nobody should support the Yahoo! offer without being able to answer Blodget's cogent argument.

Patronizer here. Read the whole thing, rarely seen anything that miopic.

Google's competitive advantage is the scale they're achieving in their data centers. Those, just like the OS, cut across consumer and enterprise providing you a cost advantage. Your author's thesis is the equivalent of recommending IBM to fight Windows by focusing OS2 on features corporate customers want (#1: reliability). Problem is ... we kind of know how that ended don't we?

I'd be curious to see what would happen were we to walk away from the deal now and come back in six months ...

Anonymous said...

"A strong 10-year veteran developer, with a CS-related degree and a strong job history would likely be coming in somewhere in the 120+ range (63/64)

That's not right.

I was a 14+ year veteran developer when I joined MS with extensive experience and after 8 years I have finally broken the 100k mark.

Salaries vary enormously at MS depending strictly on who you know and who's your friend.
"

I have never in my entire Microsoft career experienced this, and I've helped hire and offer many top-tier Devs for the company.

Something is not right here -- we do not pay top Developer talent with 15 years of experience less than 100k anywhere that I have ever seen in the company. To even suggest that we would is... just crazy.

What *exactly* do you people work on? It's certainly not any of our core businesses. Are you all in IT or MSDN?

And another question -- who in their right mind with 15 years of Dev experience will take an offer for less than 100k unless you can't find anything else in the industry? And that said, what kind of top Dev with 15 years experience has trouble finding work?

Again, I'll say: something is not right with these responses. I'm very curious about who you folks are. This is *not* the norm at Microsoft.

Anonymous said...

Something is not right here -- we do not pay top Developer talent with 15 years of experience less than 100k anywhere that I have ever seen in the company. To even suggest that we would is... just crazy.

Yes, you do actually. I got an offer for under 80K a couple years ago when I had about 14 years experience. You are correct that you would get laughed at. It has apparently been a practice of Microsoft's to lowball people for years. See this from 1996:
http://www.scribd.com/doc/413614/Microsoft-Staffing

Just because you never heard of it doesn't mean it doesn't happen.

Anonymous said...

80K! I know technical writers with 5 years+ experience in the Valley who make more.

Valley cost of living != Seattle cost of living. Duh.

Anonymous said...

Just wondering... If msft decides to go hostile and take it to the yhoo shareholders then doesn't it make sense that msft shareholder's get the same consideration?

Again, if Ballmer and company truly care about their shareholders then let's take it to a vote. Of course, this won't happen. So, let me get this straight, somehow yhoo shareholders know what's best for their company but msft shareholders don't?

In any case, here's my vote: Hell f'en NO!!

Anonymous said...

To all of these people with 10- 15- years worth of experience who haven't yet broken 6-figures at MS: The previous poster had it right. What exactly are you working on? Are you "web developers" in MSN? "Programmers" in IT? People who write sample code for MSDN?

If a software engineer with "15 years of industry experience, 8 of the most recent were at Microsoft" came to me for a job and said he was currently making $80K, I would assume he was one of these "hasn't been promoted in 10 years" hacks. That is a -pitiful- wage for someone with so much experience, unless the person is just super-terrible at software development. Or one of these ITT-tech or "self-taught" spaghetti coders.

Anonymous said...

"Something is not right here -- we do not pay top Developer talent with 15 years of experience less than 100k anywhere that I have ever seen in the company. To even suggest that we would is... just crazy."

Yes, you do actually. I got an offer for under 80K a couple years ago when I had about 14 years experience. You are correct that you would get laughed at. It has apparently been a practice of Microsoft's to lowball people for years. See this from 1996:
http://www.scribd.com/doc/413614/Microsoft-Staffing

Just because you never heard of it doesn't mean it doesn't happen.


Red herring -- the compensation philosophy was completely different in 1996 -- it was all about option wealth. But even so, we would negotiate with top Developers and make sure we didn't lose them.

The piece you posted is ancient history, btw.

But you still refuse to say what you do other than you have 14 year experience -- this does not mean you are a great Developer who can command top compensation, rather it means that you have 14 years experience in... something.

Top Developer means you have patents, you are a giant throbbing brain and your 14 years of experience is stellar and blows my hair back. That's the kind of Dev I hire -- these people were top in their graduating classes at highly rated programs, they have patents and they will create more patents because they're brilliant. Does this sound like you?

We can step down from the above until we hit 80k with 14 years experience. If you were to show me your resume, I have a feeling it might explain the 80k -- and I'm not saying this to be snarky, I'm saying this to contextualize the discussion about how on earth someone who believes himself to be a stellar developer with 14 years of experience is offered 80k in the modern era of Development.

fCh said...

MicroYahoo, Cui prodest?

* Google should only try to make it expensive for Microsoft (start a bidding war and leave the curse of the winner befall Microsoft);
* Microsoft will finally have made the capital mistake--what will have been Microsoft's most significant loss/win? Mr. Ballmer himself.
* Yahoo! will lose the game (beginning with R&D talent);
* The financial community will stand to make great fees;

for more:
http://chircu.blogspot.com/2008/02/microyahoo-cui-prodest.html

Anonymous said...

This acquisition makes me feel like I'm about to watch Ballmer attempt to do a Criss Angel stunt:

There's a deep hole in the ground and next to it is a coffin. First Ballmer said he's going to put himself into the coffin, have his friends place it in the hole and bury it (equivalent to Msft making a $44B unsolicited bid for YHOO). Unfortunately the crowd didn't think that trick was good enough so now he's saying that he's seriously considering wearing a straitjacket and nailing the coffin shut (equivalent to the possibility of a hostile takeover). Everyone but Ballmer and his friends (eg Liddell, et al) are baffled at this point since they all realize:

He ain't no Criss Angel...

Anonymous said...

Top Developer means you have patents, you are a giant throbbing brain and your 14 years of experience is stellar and blows my hair back. That's the kind of Dev I hire -- these people were top in their graduating classes at highly rated programs, they have patents and they will create more patents because they're brilliant. Does this sound like you?

Ok, this made me laugh. Maybe you should be a writer instead of Dev Manager? :-)

But back to the subject at hand: I didn't see anyone say "Top developers (aka rock stars) get offers of 63/64 and $120k coming in." I saw "Strong developers get offers of 63/64 and $120k coming in."

I would think rock stars of the caliber you're talking about better get a whole lot more than $120k if we're trying to entice them to/keep them at the Big M. People like that could go anywhere and do anything.

But just because someone isn't a rock star doesn't mean they're a doofus or "not a real developer" either. Rock stars are, by definition, the top of the top of the top. There's a *whole* lot of room for merely ("merely") strong, cranking developers (or testers or fill-in-your-job-category), and if they're only getting $80k then no wonder we're trying to buy Y!. Did Ballmer ever consider revamping the salary scheme now that, shall we say, stock options are no longer on anyone's radar (except in a very, very negative way - underwater, anyone?)? Having happy workers with strong morale might actually make a difference in our company's performance AND ability to draw fabulous workers (and even some rock stars) to our shores.

Just look at the kind of momentum Obama has been able to develop, and what all those enthusiastic, go-the-extra-mile fans are willing to do, now that they're jazzed up and excited about the political process for once. Bad morale is bound to lead to lesser products. And bad morale results from (among other things) not getting even COLA raises for years on end while wet around the collar newbies come in at higher pay.

Just as an aside, ITA with whoever said that how fast and often and high your raises are at MSFT depends *completely* on who your boss is. You can be an honest-to-god rock star and get 10%-ed if your boss doesn't like you. Period.

Anonymous said...

Cuban said the following:

"If there is one thing Microsoft does well, it's to ignore Wall Street and invest in its corporate strategies."

Is this just a nice way of saying our leaders are good at ignoring shareholder value? Here's a problem I have: I'm a "strategy" guy. My job is to create and understand strategies somewhere deep inside Msft. Unfortunately I don't have an understanding of those "corporate strategies" he's referring to. Does anybody else? Does anyone really have a clear understanding of the strategy behind our attempted acquisition of Yahoo? Do you think more people might be rallying behind Ballmer/Liddell if we had that understanding?

Sure, it's human nature to initially react not so well to potential change of this nature - especially when your stock was finally going up only to find that it's back to the same price it was 7 years ago. React well? Hell, that's amazingly painful!! More importantly, it's a huge hit to employee morale. The difference between the mood in my office from early Nov ($37/share) and today is like night and day. If we proceed with this acquisition during this economy then the reality is our stock is stuck in the $30/share range for about another 2 - 3 years. Funny enough, that happens to be close to the time when the very last set of options expire.

It does make you wonder. How do we always manage to kill the rise in stock price right at the time when we start to see it happen? Coincidence?? At this point I'm just not buying it anymore...

Anonymous said...

On the whole 150 years experience / 80K compensation thread. 0.02: get over it.

In this country slavery was abolished a long time ago, if you're worth more go get more. BTW if you can't you may want to consider changing your attitude to "what can I do to start earning what this company is paying me"?

On the "H1B visa I'm getting screwed" concept. As a fellow immigrant I completely sympathize with you. When I came over (with IBM) my offer was 30% less than a comparable US dev was making. Still, I was "dumb" enough to look at it as 400% of what my peers were making in my home country and feel overpaid. That was me, if you feel otherwise let me remind you that the slavery comment applies to all of us.

Anonymous said...

Please stop complaining about levels and assuming that level or promotion velocity indicates a quality employee, lack of it indicates a poor employee, or even the opposite extreme (quick jumps = overleveled).

I have been in many different divisions in MS, and the leveling is wildly different per skill level. None of them are necessarily wrong or right. The corporate inconsistency, however, is the real problem.

Anonymous said...

Please use the MS poll next month to send a strong message that you do not have faith in the senior management of the company. I don't know if it will be very effective but at least we would have sent our message

Anonymous said...

from the new dare:

To Mini-Microsoft: On Building Software Experiences that Delight Users

Anonymous said...


Top Developer means you have patents, you are a giant throbbing brain and your 14 years of experience is stellar and blows my hair back. That's the kind of Dev I hire -- these people were top in their graduating classes at highly rated programs, they have patents and they will create more patents because they're brilliant. Does this sound like you?


You do realize that in a company with 80,000+ employees, many of which aren't developers that the majority of people hired can't possibly be blow-your-hair-back talented. I would even go so far as to say that maybe only the top 5% of developers might get these great offers we all here so much about on here. The truth of it is that hiring managers/committees try and offer the least they possibly can, especially if they gauge that a person isn't good at bargaining. All the better for the company bottom line.

Aside from these talent arguments, where have we gotten in society that a person would works for 15 years and only makes $100k is complaining that they don't make enough? From where I come from, middle class America, that's when you've made it. The median national income is $48,000. So, if you alone are making twice the median, how exactly is this bad?

Don't get me wrong, I enjoy getting overpaid like the rest of you, but you won't hear me complain very much about how criminally undervalued I am.

I think people in the software industry have a very short memory. Look back to 2000 to 2002, just in case you were in college, and just how many companies, and employees, bit the dust. It could easily happen if our downturn turns into a recession, especially if it ended up being a bad one. We all get to use our brains for a living, and get paid quite well if you ask me.

Anonymous said...

* Google should only try to make it expensive for Microsoft (start a bidding war and leave the curse of the winner befall Microsoft)

Is anyone going to take a bid from Google seriously? There is absolutely no way in hell that regulators would let that deal go through, so IMO any bid from Google can safely be ignored.

Anonymous said...

hmmm... yahoo employees don't want this acquisition and msft employess don't want this acquisition.

And somehow somebody sees this as a recipe for success?

Anonymous said...

* Google should only try to make it expensive for Microsoft (start a bidding war and leave the curse of the winner befall Microsoft);

I doubt Google would do that. They know better, else they would not be where they are.

Anonymous said...

It's clear that acquiring 13,000 Yahoo employees who don't want to be associated with Microsoft is not going to lead to integration happiness. You will have spent $44B (probably more) of your hard earned money to make rich a bunch of people who don't like you and don't want to cooperate with you. You can't force them to work for you even if you pay them lots of money. They'll just do their time and leave when their options vest. And the truly great people won't even stick around for that. At the same time you will alienate a bunch of MSFT employees who's stock will be worth much less. Assuming MSFT succeeds with it's hostile takeover, how does it then get its money's worth? This whole thing is a spectacularly ill-conceived idea.

MSFT employees stood by while Bill and Steve made a royal mess of the anti-trust situation (remember that long nightmare?). You stood by when they paid $6B for aQuantive (??!!??). And also when they invested in Facebook at a $15B valuation (wtf??). Those were the warning signs. It seems high time that people start making some serious noise and try to knock some sense into the bubble boys who run the company, before they totally wreck it. Everyone but Ballmer, Liddell and Johnson know this deal will be Microsoft's biggest disaster yet since there is no way it can actually work.

Anonymous said...

Sigh... According to the Wall Street Journal, Microsoft is likely to sweeten its bid even though their are no rival bidders. The reason? To secure the 'goodwill' of Yahoo staff and management. Didn't anyone ever tell Steve and Chris that you can't buy love? More $$ down the drain, plus the integration nightmare of taking in thousands of new people who don't want to work at Microsoft.

Anonymous said...

Just as an aside, ITA with whoever said that how fast and often and high your raises are at MSFT depends *completely* on who your boss is. You can be an honest-to-god rock star and get 10%-ed if your boss doesn't like you. Period.

Yes, this is true all over the world in every company -- if your boss doesn't like you, then you will likely not do well.

The interesting point to ponder for the purposes of this discussion, I think is this: what about Microsoft makes self-proclaimed "rock star" employees willing to suffer low pay under bad managers year after year without actually leaving the company for greener pastures?

Are we really to believe that talented people who should be able to command 50% more on the open market than they're currently making at Microsoft are willing to surrender their most productive years under a spectacularly incompetent regime of clueless management and bad products?

I'm reading about Developers with 15 years of experience who, for whatever reason, have been compelled to accept insultingly low-ball offers from Microsoft and who end-up spending years working on products they don't believe in and for people they hate.

My question is -- who's at fault here?

Anonymous said...

I would think rock stars of the caliber you're talking about better get a whole lot more than $120k if we're trying to entice them to/keep them at the Big M. People like that could go anywhere and do anything.

Somewhere around the time that SteveB took over/the dot-com crash Microsoft lost its way with regard to how it treats its employees. The company's management has such an arrogant attitude and treats its employees in a way that suggests that they think:

1.) Our management is top notch, cream of the crop, the very best there is.

2.) We only hire top notch, cream of the crop, giant-throbbing-brained, patent-writing engineers who gladly accept industry average salaries to join our elite team.

3.) If you aren't a big-brained, patent-writing engineer you are Banta fodder. Don't let the door hit you on the way out.

The company is not humble in any way and this is what has caused the industry and customers to turn against it. Who likes being around arrogant, my poo doesn't stink people? Nobody.

This attitude as demonstrated by the "dev manager" here is part and parcel of the caustic atmosphere inside the company that is causing it to struggle with going anywhere beyond the monopoly feeding trough that it has been at since the early 80's.

The company was not founded by, nor did it make its ascent, using people who were "top in their graduating classes at highly rated programs". But the company appears to be wallowing now that it is staffed with these geniuses.

Anonymous said...

In the scheme of all things, I have to side (temporarily) with Mini on his take about the potential purchase of Yahoo. Hostilities of the hostile takeover attempt aside I am reminded of the interesting friendship between Bill Gates (essentially having stepped down from running Microsoft) and Warren Buffet.

Bill Gates and his managers are known for micromanaging and internal meddling on levels that test one’s imagination while Warren Buffet is known for buying companies, and always leaving the management of the takeover up to the original management, especially if that management was the primary shareholder. There is also the second interesting dichotomy of Microsoft stock value stagnant and Berkshire Hathaway stock having returned value beyond any common man’s comprehension.

The truth is that no one (not even those inside Yahoo only interested in profiting from the deal) really trusts Microsoft to leave anything alone after purchase. It would be the death knell of Yahoo and certainly would cause me personally to divest myself from all association with Yahoo—email, my Yahoo, stock etc., as meaningless as that is. To paraphrase the dark character Terry Benedict in Ocean’s Eleven, “but to be honest, I just don’t trust you”, speaking to the old thief in character as Lyman Zerga, a rich and powerful benefactor.

The point is that if you want to buy Yahoo, go ahead, but you had better leave it alone after you do because any other action would (financially speaking) be akin to locking everyone inside the building and turning on the gas.

But on second thought that has to be Balmer’s strategy: turning off Yahoo a primary competitor, with a key to corporate strategy and internal mechanisms. This would only provide Microsoft with enough access to leverage aQuantive, MSN and Live in ways that, like invasion of the body snatchers, would look and feel like Yahoo, but would be Microsoft through and through. It would be an AOL purchase of Netscape all over again with the end result a null set, at least for Yahoo anyway. Besides, it is well considered that Microsoft itself was somewhat involved in manipulating certain aspects of the AOL-Netscape merger.

It also has not gone without notice that Yahoo stock value is now at relative parody with offered stock value. Why would any Yahoo stockholder sell to Microsoft when he or she can just sell their shares today and obtain the same value. In addition to that, Yahoo has had valuation in the 300’s on multiple splits, and future value increase is not unreasonable. If anything this offer has to give Yahoo the courage to do better, including getting rid of some of its incompetent management layers. Any realistic offer has to be in the $100/share range. Right. Balmer would not pay that.

I was personally saddened by the announcement of Danger being bought by Microsoft as I had intended to purchase a sidekick next phone around. I will probably now buy an iPhone, much to my own dismay, also because I do not trust Microsoft either, and Danger had, prior to the purchase, been one of the few independent phone operating systems out there.

I leave you with some interesting reading about valuation of companies from Jeff Matthews: A must read for Yahoo and Microsoft partners alike.

http://jeffmatthewsisnotmakingthisup.blogspot.com/2008/01/been-to-dairy-queen-lately-part-ii.html

http://jeffmatthewsisnotmakingthisup.blogspot.com/2008/02/been-to-dairy-queen-lately-part-iii.html

Anonymous said...

Or to express your support. Not everyone thinks this is a bad deal.

Anonymous said...

"Is this just a nice way of saying our leaders are good at ignoring shareholder value?"

My take is it's a not so veiled indictment of MSFT overall (Cuban recently posted that he dumped Vista and went OS X, for example), but a grudging acknowledgment that Ballmer and Gates do take a longer term view than most. Of what, we're not quite sure. Shareholder value creation is getting fairly suspect at this stage nearly a decade into Ballmer's CEO run, as you point out.

"It does make you wonder. How do we always manage to kill the rise in stock price right at the time when we start to see it happen? Coincidence?? At this point I'm just not buying it anymore..."

It certainly seems that way. The alternative theory is the stock just wants to tank under the belief that MSFT's best days are behind it and the lack of confidence Ballmer has engendered. And while buybacks and some decent quarters are sufficient to occasionally drive it in the other direction for short periods, it's always just one move away from reverting back to where the bulk of momentum is driving it.

Anonymous said...

Suppose Jerry Yang is the real prize, as the successor to SteveB?

Anonymous said...

You have to wonder how a post about an aquisition gets comments centred on low salaries for developers. Perhaps these commenters should start the poor me blog.

Anonymous said...

"Please use the MS poll next month to send a strong message that you do not have faith in the senior management of the company. I don't know if it will be very effective but at least we would have sent our message"

LOLZ. You must be new to the company.

Anonymous said...

The company was not founded by, nor did it make its ascent, using people who were "top in their graduating classes at highly rated programs". But the company appears to be wallowing now that it is staffed with these geniuses.

Oh, I beg to differ. The Microsoft I grew-up in made its ascent by hiring only the best and the brightest, and we lost our way when we lowered our standards.

And my-oh-my, lower them we did.

Ask Google who THEY pride themselves on hiring. Go on, ask them...

Anonymous said...

>> Top Developer means you have
>> patents, you are a giant throbbing
>> brain and your 14 years of
>> experience is stellar and blows my >> hair back. That's the kind of Dev
>> I hire

Pray tell how many of those you've hired, because in 7 years here I haven't seen any. What I have seen is that sometimes we hire average devs with better than average self-promotion skills, and those seem to do really well.

Anonymous said...

Please use the MS poll next month to send a strong message that you do not have faith in the senior management of the company.

Ha ha. Year after year we hear these calls and nothing ever comes of them. Going to ask for people to wear black armbands to the company meeting again too?

Anonymous said...

The conspiracy theory is that if the stock price gets high enough, a bunch of executives and senior employees will cash out and leave, which would arguably ruin the share price and the company. Ballmer may be saying and doing boneheaded things every time the price gets to the 30s in order to maintain the status quo.

I'm not saying I believe this but stranger things have happened.

Anonymous said...

"Top Developer means you have patents..."

Have you ever bothered to read the details of what your "Top Developer" has patents for. Usually they are for something they didn't develop or it is so trivial you can't believe it was ever patented.

A few years back there was a bonus offered if you got a patent awarded (nowadays it isn't that much). Sure enough, people started looking all over the place for things to patent. "Hey, that gradient on the button on our dialogs - we should patent that!" Never mind that they didn't develop it (probably was done a decade before they arrived at MS) or was not even a novel idea. Bonus! Visibility!

I remember being in a meeting about a patent and every PM in my building decided to show up to put in their 0.02 just to get their name included. They had no idea what they were talking about but hell, they played the game.

So, just to sum up, don't bow down to a guy just because he has a bunch of patent cubes.

Anonymous said...

Anybody notice the new job title being floated around recently? "PM in Test".

This is what you get when you lay down commitments that downgrade the value of actually doing your job and instead gaining "visibility". Last year when our review commitments changed I had thought it was a joke. I figured, hey, I'll just kick ass at my job and ship a great product. I've always been rewarded in the past for that. I guess I was wrong.

I'm sick of my lead saying that all the work I have done to make the product better, work with customers, and help my peers was, for my career, all for nothing. Instead I should have been like these ass clowns on my team which send status mail about projects they don't even work on. These are the same people who's job title has just been leveled-up in headtrax this month.

I give up. This company doesn't give a crap about its products or its employees. Five years from now, nobody at MS will be producing anything. We will all just be sending project status emails to our teams.

If I wanted to work with a bunch of brown nosing manager wannabees I would have gone to business school.

For all of those who, like me, have had enough - get your resume updated and start looking around. And for all you kids still in college and considering MS - don't waste your 20s here like I did. The Seattle area has a lot of great startups looking for smart people with a passion for building great software. No manager permission required.

Anonymous said...

Here's my observation of the talent at Microsoft:

We do have some super smart people at this company but within that group I have never seen so much unstructured undisciplined raw intelligence in my life. And this is a reflection of this arrogance people are talking about, in my opinion. So many of these people are just too difficult to work with. I've never had so many people who have either zero or very little skills in my specific area of expertise tell me how to do my job.

It is so rare when you can find someone who has patience and strong preplanning skills. Everyone just wants to deploy without spending the time to preplan and design. It's amazing how often we redeploy the same technology or feature over and over again because we're so eager and driven to meet a deadline which rarely has any significance anyway.

We value the person who can answer the question the quickest - not the one who takes thoughtful time to consider all possibilities and align the best answer with our underlying principles. Principles?? Hell, is that even a term that people use at Msft?

Notice that I didn't even comment on the quality, or lack thereof, of our management. Is anyone even interested in managing people at this company because they have a passion for helping others achieve their goals? Or is it just about climbing the corporate ladder? Hell, do we even have a choice? I'm sure it's well known now that they're forcing L63-64s out of the company if they've been at that level for more than 2-3 years. Got 10 or so years under your belt? They don't f'en care.

We take this time-to-market strategy to a degree I have never experienced at any other hi-tech company in my life and this is clearly reflective in the quality of our products. It's a shame because there's so much potential to make great things happen at this company yet I continue to be disappointed. There are just so many things wrong with this company.

Yahoo employees and shareholders, you do NOT want this acquisition. The Microsoft culture is not one you will enjoy or care to embrace. It will drain you. Our stock price is screwed but you can save yourselves. Dump your stock and get out now!!! Go enjoy your families - there's so much more to life than dealing with this Microsoft arrogant insanity.

Anonymous said...

It also has not gone without notice that Yahoo stock value is now at relative parody with offered stock value.

Oh, it's a parody all right...

(Come on, everyone who knew he meant "parity" was thinking the same thing).

Anonymous said...

>Suppose Jerry Yang is the real prize, as the successor to SteveB?

What a fascinating observation. There are few people who I believe would actually be the right person at the right time to take over Microsoft as a Balmer replacement.

That said, Yang has done to Yahoo what Balmer has done to Microsoft in some ways. Both companies are languishing in agony as Google takes the no. 1 position and both companies have been hemorrhaging for years in stock valuation.


But too be sure, the claim that Microsoft should not be in advertising is total nonsense, as it is apparent that the days of the one company OS are numbered at best, even with Windows 7. The world wants a more diverse selection of OS choices and who is to say that the OS won't eventually just be a built in invisible function of the application at some point focused by a virtual machine on the front end.

Yes. Jerry Yang could save Microsoft no doubt, bringing it safely into a strong competitive position in the new age of cloud computing. It also is the ONLY way Yahoo could ever be successfully integrated into Microsoft.

Anonymous said...

"Five years from now, nobody at MS will be producing anything. We will all just be sending project status emails to our teams."

Don't forget sharepoints! We will all be creating sharepoints for our teams/projects/building/pets/whatever. Hey everyone! I generated a sharepoint site! I'm adding value! Remember my name!

Anonymous said...

I give up. This company doesn't give a crap about its products or its employees. Five years from now, nobody at MS will be producing anything. We will all just be sending project status emails to our teams.

Five!! My my you are optimistic! Pick a smaller number.

Anonymous said...

Don't forget sharepoints! We will all be creating sharepoints for our teams/projects/building/pets/whatever. Hey everyone! I generated a sharepoint site! I'm adding value! Remember my name!

Oo! Oo! When you get your sharpoint site up, I'll add value and migrate a bunch of documents over from the old sharepoint site! Then we can fight over who gets to run the team training meeting so everyone knows where to find the design docs.

Ha ha, I kid. Of course the design docs are just a bunch of half-filled out templates.

Anonymous said...

I asked a coworker today what it was like when their company got bought by Microsoft. It wasn't good.

All the A players quit (and made a ton of cash in stock), the B players that were left were treated poorly and almost fired for pushing Microsoft technologies over the open source the company was built on, even though the technology had extremely serious performance issues and couldn't scale and they couldn't deliver features!

The aquired company declined rapidly and moral dropped sharply, Microsoft never touched it but they should have.

I don't think management has thought about the effect of 14,000 employees who don't want to work for Microsoft, and the few that do want to be Microsoft punished, and the Yahoo product becoming even crappier.

In the company meeting Ballmer pushes passion, love and pride, with an aquisition of Yahoo, his great speeches will not be nearly enough to keep the moral from tanking the company.

It shouldn't be about search market share today, but about the people, because the products Yahoo has will decline rapidly with the people.

Anonymous said...

wsj reports a shuffle in execs on thursday:

http://online.wsj.com/article/SB120295509374467193.html?mod=googlenews_wsj

Berkowitz is a welcome departure to say the least.

Anonymous said...

That's it...I'm done. I guess in my small way, I'll contribute to a more Mini Microsoft. I'm actively looking to get out. Interviewing aggressively outside the company and the first good offer I get, I'm out.

Fact is, I just don't believe in our executives anymore. From GMs on up, I have yet to find one that really knows how to deliver. I have yet to find one that knows how to maximize company value or manage employees. I don't believe in our company strategy anymore. I am plagued by the bureaucracy. I get nothing done all day and not for lack of desire or passion, purely for the fault of "process" without basis. I am incredibly amazed at the stupid people we hire. When sitting today with a product manager talking about packaging up X products with services, I was hitting a wall over and over again in explaining things and finally asked, "have you ever used X product?". The answer was no...Incredible. And it hit me...I just don't believe anymore that MSFT has the best and brightest. I'm interviewing on Wall Street...have you ever talked to an engineer that works at a place like Goldman Sachs or SwissRe? Those people will blow you away with their intellect. I doubt you could find more than 5 people in the Excel product team who could code up a Monte Carlo simulation let alone tell you what it was. No, the quality of people has gone down since I joined 10 years ago.

So I'm done, and until I find the gig, I'm pretty much checked out. It makes me so sad. I have a strong work ethic, but increasingly have found myself content with complacency as I remember that a 50% increase in my effort will not result in one penny more or less. And that's just WRONG. I don't like feeling that at all. I have given my all to this company. Three kidney stones (2 on the road for the company), an ulcer, a divorce and ever depreciating value of my "compensation"...and all as I tried to maintain my passion for a company that clearly doesn't have passion for me.

And so I'll mourn for a bit, I'll detox (some of it on the clock) and as soon as I get the offer, I'm out. I just don't believe in the future of Microsoft any more. Kisses to all...

Anonymous said...

Finally, Pieter Knook is out! Thank god! http://www.news.com/8301-13860_3-9871715-56.html

RattleSnake said...

:-O
I believed it then i didnt then i did i wonder who was really behind the decision

:-I

:-)

Anonymous said...

So, what is MS likely to do to get more marketshare online if the Yahoo deal falls through? Is there an even worse deal waiting in the wings (AOL?) or would MS fall back to smaller acquisitions or something else?

Anonymous said...

Ballmer may be saying and doing boneheaded things every time the price gets to the 30s in order to maintain the status quo.

Next time he can just throw some chairs around, scream he'll fu... kill Google, kick his dog or something, that should do the job ...

Regarding companies being bought by MS, I know two companies acquired cases where the A players accepted the MS positions, did barely anything their first year, cashed their sign up bonuses and exercised their 1/5 of awarded options/shares, and they were gone after that. Basically the MS bribe did not work at all since MS did not even get one year productivity from those people. Where the technologies ended up? One was rewritten from scratch and died, the other one is dying and will be replaced with some "greater" technology; basically did not do well.

Anonymous said...

Yes, this is true all over the world in every company -- if your boss doesn't like you, then you will likely not do well.

Of course that's true. The difference is that MSFT tries to pretend that everything is measurable and fair. If they'd just admit it's all subjective like at every other company, folks would spend less time demonstrating that (of course) it is not.

We might have a whole different set of issues, but at least we'd be talking oranges to oranges. Trust me, engineers (and most other folks) do NOT like to be told there are objective measures when they aren't. It's called "lying."

Of course, there are lots of other "unique" things here about employee leveling, compensation, job xfers, etc. It's really the most bizarre mix of "old style" (when stock options were king and everything else was just noise) and "new style" (billions of processes to "ensure" fairness, accountability, etc.) If I didn't love my job and my manager (oh, and if this country had decent nationwide health care so I didn't depend on these health benefits), I'd go seek greener pastures. Of course, I'd also probably get enticed back - at a higher level, for better pay, and don't forget, a nice fat bonus. :-)

Anonymous said...

The interesting point to ponder for the purposes of this discussion, I think is this: what about Microsoft makes self-proclaimed "rock star" employees willing to suffer low pay under bad managers year after year without actually leaving the company for greener pastures?

Who says the rock stars who get undercompensated stay? Most of them figure it out and leave. That, if you haven't been paying attention, is a problem.

A *bigger* problem is when MSFT pays attention ONLY to rock stars and thinks that the success of the company depends ONLY on keeping them happy. It actually takes a whole lot of worker bees to implement and distribute and support the work of a single rock star. And without all that support, you get a lot of vision and glory...and zero of it gets out to customers where it can bring in profits.

Anonymous said...

' conspiracy theory is that if the stock price gets high enough, a bunch of executives and senior employees will cash out and leave'

I read this and I feel for the poster who wrote this. It is comforting to think that the horrible stock performance is part of some evil genius scheme by ballmer/lidell to manipulate the market because it offers the hope that one day they will turn off the 'tank stock' switch and all of your options/stock grants will magically go up again.

when i was with ms (left back in Oct)i harbored a similar and ultimately vain hope. Here are the sad facts:

1. Microsoft stock has become a utility company. From the outside there is so much indifference or lethargy towards this company that in the best of times i don't feel like there's growth to be bought for my stock money

2. I remember when MS was a blue chip: Ok so we see (based on historical stock price over last decade) that MS is not a growth stock...but in theory you could at least park your money there...except now there are more and more bizarre deals, moves that management keeps making and misfires with product launches (love or hate vista...the rollout sucked).

Anonymous said...

Something is not right here -- we do not pay top Developer talent with 15 years of experience less than 100k anywhere that I have ever seen in the company. To even suggest that we would is... just crazy.

What *exactly* do you people work on? It's certainly not any of our core businesses. Are you all in IT or MSDN?

And another question -- who in their right mind with 15 years of Dev experience will take an offer for less than 100k unless you can't find anything else in the industry? And that said, what kind of top Dev with 15 years experience has trouble finding work?

Again, I'll say: something is not right with these responses. I'm very curious about who you folks are. This is *not* the norm at Microsoft.

Well, here is my story if it can convince you for anything (I am not OP):
I was hired at L59 in 2001 as dev on H1B. The offer stated "SDE in BLABLA group".
By the time I arrived, I was "reassigned" to be SDET in parallel team - to work on "infrastructure tools". My lead was lab manager, my peers - CSG and one SDET, who were setting servers in the lab. My first review was 3.0 . Once a year has passed (and one can't change teams during the first year) I passed the interview for an L62 dev position in windows COSD. My manager was young and just-promoted, my second review was 3.5 and no promotion. There was a reorg next year, and that was a first time I've got a manger with guts - I've got 4.0 and promotion to L60 after 3 years in a company. I have 5 patent cubes, on 3 my name is first. My code is in windows kernel (and one of the patents is for that). Many in my team honestly consider me a star. I'm still below 100K. Hint: you can't go outside, work for a year, and return to L63 position while you're still waiting your GC. So YMMV.

Anonymous said...

"Are we really to believe that talented people who should be able to command 50% more on the open market than they're currently making at Microsoft are willing to surrender their most productive years under a spectacularly incompetent regime of clueless management and bad products?"


If you don't believe it, you are clueless.

Many people stick with Microsoft because they believe in its success and the reflected success on them. And the company is still a big success, despite blowing a ton of its potential.

I personally was not happy at Microsoft, was not leveled especially fast, and had recurring issues every performance review. Frankly my reviews got better as I stopped trying hard, and began to do the minimum possible to get away. Moved to a team that I thought was less A-type (I don't think the people involved have shipped ANYTHING of value for over 8 years) but that I could relax in. And I started doing better, career wise.

I still wasn't happy though. Finally I got over the hump and decided to move on. I interviewed with those 'other companies' and got some good offers. Not a 50% raise (especially considering the truly world class health plan I have left behind) but pretty damn close.

The ironic thing is that I'm having incredibly great 'cross-team impact' and 'visibility' at my new company than I had any chance of doing at Microsoft. And it's mostly due to having people above me not just listen but appreciate what I'm doing.


To those staying at Microsoft because you believe leaving would be some kind of failure on your part, don't be afraid (if you don't understand this feeling, this comment isn't intended for you, just move on to the next comment). Spark up your mind again, work on fun coding problems and dial back your level of caring at work. Get yourself ready for a set of interviews, and get ready to nail them. And stop fighting the system at work, just do what makes your manager look good. If you don't know what that is, go in and talk heart-to-heart. Admit your shortcomings and just say you want the current project to be the best work you're ever done. They will let you know almost exactly what they are loking for (usually some crappy thing you don't care about). Just do it, and nothing else, no flair and no flourish. Screw cross-team crap and visibility as well, just do this one thing and use the rest of your time getting ready for cross-company interviews and job application visibility.

You can undoubtedly make more than you do today. If you have spark and leadership (however repressed from being under the weight of Microsoft's bloated ranks) you will make much more.


As for the clueless person who I am replying to, you've seen many many of them at Microsoft, though the old school is dying out. IN the 90s there was a very real feeling that everyone at Microsoft could do well, and those who were smarter or better able to get things done would be set for life. Both in promotions and money. And in self-respect these folks had their heads massively inflated; they were not just lucky, they were geniuses. They saw complete idiots around them who couldn't get the job done, and weren't beign rewarded. So these swelled heads assumed the reverse: anyone not getting rewarded was an idiot.

This is not reality anymore, even if it ever was.

[glad I left before this Yahoo crap tanked my stock sales]

Anonymous said...

Let's suppose that you were one of Yahoo's top search experts. And suppose that the acquisition goes through and you learn you are now going to be reporting to a Microsoft search boss, a member of the team that has been for a decade been doing considerably worse at search than your own Yahoo team.

Would you stay on? Or would you quit and go to Google?

Anonymous said...

As a militant Microsoft-hater, I hope this deal goes through. Microsoft is going to do what it always does, namely try to merge Yahoo into Live, and both of them into Windows and Office. The effort will be a half-decade long managerial and technological disaster, and will turn away users by the tens of millions, and while Microsoft is busy destroying itself, Google and the rest of Web 2.0 will charge ahead.

I thought it was going to take decades to unseat Microsoft from its dominance of the computing world. I never imagined that Microsoft itself would speed up the schedule through a bizarre, irrational decision.

Anonymous said...

"The fact that we've initiated this acquisition, for whatever reason, means that the people in charge haven't been able to deliver and are not on a path to deliver. Accountability?"

Exactly. They should be fired for incompetence, but instead, if the deal goes through, they will be put in charge of the new combined entity. Can you imagine SteveB et al getting rid of their friends for a bunch of Yahoo executives? No, which is why Microsoft is in such trouble.

Anonymous said...

And bad morale results from (among other things) not getting even COLA raises for years on end while wet around the collar newbies come in at higher pay.

Just as an aside, ITA with whoever said that how fast and often and high your raises are at MSFT depends *completely* on who your boss is. You can be an honest-to-god rock star and get 10%-ed if your boss doesn't like you. Period."


+1. With some of the best results and hardest work of my 20 year career (5 at MS), last year I was Achieved/Strong, and my Comp-A went from 1.03 to 0.93. I gave up a full year of my family life to ship (product name omitted), received many thanks from v-teams on which I participated, and management rewarded me with a mediocre review and compensation that sank me below median for my level. The previous year, with a similar level of efforts and results relative to my peers, I achieved both a promotion and a sizable stock grant.

SteveB, there's an old story about people who are always looking over the fence for greener grass (or a company doing something better than we are, to acquire). And each time they get to a new place, the grass quickly turns brown (was that the new management we put in place? the requirement that we spend untold millions retooling the technology for Windows? did the people who kept the grass green leave because they just didn't like us?). Before we create another patch of brown grass, let's clean up what we've got. Management accountability at the senior levels appears to be getting better (Berkowitz et al). That's a start. But we still have a long way to go, and my personal experience as an IC illustrates it.

The differentiating variable in my situation was a change in management thanks to a reorg. Our manager didn't support an initiative the GM wanted, because he felt it would add unacceptably to the workload of a team already stretched tight, so he was kicked out and replaced with a longtime crony. And yes, being dumped in to the 10% bantha fodder category is what I expect this year, due to a new manager so jealous of my accomplishments and earned rewards that he's practically put it in his commitments to demonstrate to all around him that "Joe's not all that, he just looked that way because his other 4 managers didn't recognize he's an idiot." The only way it appears I can avoid it is to leave MS, because they're refusing to transfer me out on the grounds that I'm a performance issue since I can't get all my work done. True that, but what HR won't factor in when accepting that as gospel is that no one else on the team can, either. We've been woefully understaffed since the LH reset, management's attempt at prioritization is to insist it's all pri 0 and exhort us onward, applying a whip when necessary, and the org WHI is in the toilet due to an intolerable effort/reward ratio and people missing their kids. Few people on the team don't want off it, but most are new grad hires and are staying put out of fear. They've seen what has happened to those of us who try to get out - we're labelled disdainfully as climbers, as useless for both the group and anywhere else in MS anyway, and our futures go out the window.

Yahoos, if you're in a good org here, it can be a great work experience. My first four years ranked as the most enjoyable and professionally positive in my career, though I won't lie about the need for work/life balance sacrifices that have at times been tremendous. But I've never been treated as poorly by any employer as I have been the past year, and it's soul-crushing in addition to being non-conducive to doing my best work. And if you're like me, the thrill that comes from doing your best work, building a product you are at least moderately proud of, and succeeding is why you're in tech.

I'm currently working on trying to explain to my wife why I need to seriously consider a $110K offer from a startup at the beginning of a recession, when my grant-augmented MS income is nearly $150K.

Anonymous said...

...as it is apparent that the days of the one company OS are numbered at best, even with Windows 7.

How is it apparent? Please explain because our revenue & earnings growth and our guidance through FY09 tell a very different story. As much as I hate this company and I'm just dying to get out, you can't really ask for better revenue & earnings growth than what's currently sitting on the table with our current product set. There's still huge growth potential in places like Russia, China and India. And why not purchase a series of smaller strategic ad companies and/or invest a minority stake in them?

I think that taking on such a large acquisition at a time when we should be settling in for a very rough economy in the US and focusing overseas is a monumental mistake. There's a much better chance that Yahoo would be begging for someone to acquire them in about 2 - 3 quarters anyway. We were in a position of significant strength right up until we announced this acquisition.

And what really takes the cake is that we have no issues with going hostile. God, are we ever going to change!!!??? We have to be the most spoiled rotten arrogant company in the world. It's just pathetic.

Anonymous said...

Finally, Pieter Knook is out! Thank god!

NO KIDDING. Now if we can get Todd Warren to go as well. Windows Mobile would be so much better if there were leaders who cared about the overall product versus just beating RIMM, Apple, etc. If our phones would *work*, we'd have a lot more customers.

Anonymous said...

But too be sure, the claim that Microsoft should not be in advertising is total nonsense, as it is apparent that the days of the one company OS are numbered at best, even with Windows 7. The world wants a more diverse selection of OS choices and who is to say that the OS won't eventually just be a built in invisible function of the application at some point focused by a virtual machine on the front end.

Invisible function? Focused by a virtual machine? What in the world are you talking about?

Operating systems at Microsoft are dead because of people like you. People who declared them dead and said we need to move to online advertising. What's the result? Vista is a disaster and we're playing (and losing) catch-up to Google. Basically we're failing at both because of your mentality.

How about you go tell Apple that operating systems are dead? They apparently didn't get the memo.

Anonymous said...

If our phones would *work*, we'd have a lot more customers.
Well, they do as designed, they are called dumb phones.

Anonymous said...

I'm currently working on trying to explain to my wife why I need to seriously consider a $110K offer from a startup at the beginning of a recession, when my grant-augmented MS income is nearly $150K.

Tell her, "Because I don't want us to wind up in divorce." See, when you hate your job, it's really hard not to bring some remnants of that bad attitude home. A job we hate can corrode us as people and damage our relationships with those around us.

Of course, it's better to not let a bad job situation ruin your attitude, even your attitude at work, but... well, I haven't always done so good at pulling that off.

MSS

Anonymous said...

>"How is it apparent? Please explain because our revenue & earnings growth and our guidance through FY09 tell a very different story."

AND

>"Invisible function? Focused by a virtual machine? What in the world are you talking about?"

I am talking about something that is unlikely to be understood by a dedicated myopic waxing for the old days softie. It may take five years, ten years, twenty five years whatever. The OS is history, at least as we know it. Crap, in 2025, computing devices are expected to be sentient. BTW, WTF are you talking about? Resurrecting Windows 95?

But really, there are other companies and people in the owrld besides those at Microsoft. Get a grip, and please, please please, just keep on keeping on softie. It really makes me smile.
;)

Anonymous said...

Let's suppose that you were one of Yahoo's top search experts...

An excellent post and apparently a thought experiment that never occurred to our fearless leaders.

Let's suppose you were one of Yahoo's top messaging people or top advertising systems people or top do-er(*) of any sort. You'd have to be crazy to stick around and transition your work to a platform that's personally noxious to you.

Maybe that really is Ballmer's secret plan. One fine morning, people connect to Yahoo Mail and get Live Mail instead. And they'll happily proceed as if nothing changed. Sure thing.

(*) I separate out the people who actually make and keep things from their own PMs who'll happily sign up with our glorious crusade.

Anonymous said...

"Are we really to believe that talented people who should be able to command 50% more on the open market than they're currently making at Microsoft are willing to surrender their most productive years under a spectacularly incompetent regime of clueless management and bad products?"


If you don't believe it, you are clueless.


Incredulous yes, clueless no.

My point is that if you choose to stay in a situation that does not pay you well, where you hate what you're doing and despise the people you're working for... then you only have yourself to blame.

BTW, there is no rational counterpoint to the statement "If you aren't happy somewhere after trying and trying to make it work, and if you have other opportunities to explore, then you should leave before you destroy yourself."

Duh? Duh.

I continue shaking my head in wonder at all the people who continue working for Microsoft who have apparently been miserable for *years*. I actually enjoy the work I do at Microsoft, but you better believe that if an entire year goes by where I'm miserable and I don't see a light at the end of the tunnel that I will leave before I become as hateful, angry and bitter as some of the posters here.

Anonymous said...

I'm currently working on trying to explain to my wife why I need to seriously consider a $110K offer from a startup at the beginning of a recession, when my grant-augmented MS income is nearly $150K.

I wouldn't blame Mini if he bypassed the CRF and sent this one straight to digital heaven, but I gotta say it anyway...

Unless your wife is contributing at least $110k a year to the partnership, why are you "working" on any explanation?

(Yeah, I know the probable reason, but I ask anyway on the off chance that you might actually have a good one).

Anonymous said...

I was hired at L59 in 2001 as dev on H1B. The offer stated "SDE in BLABLA group".
By the time I arrived, I was "reassigned" to be SDET in parallel team - to work on "infrastructure tools". My lead was lab manager, my peers - CSG and one SDET, who were setting servers in the lab. My first review was 3.0 . Once a year has passed (and one can't change teams during the first year) I passed the interview for an L62 dev position in windows COSD. My manager was young and just-promoted, my second review was 3.5 and no promotion. There was a reorg next year, and that was a first time I've got a manger with guts - I've got 4.0 and promotion to L60 after 3 years in a company. I have 5 patent cubes, on 3 my name is first. My code is in windows kernel (and one of the patents is for that). Many in my team honestly consider me a star. I'm still below 100K. Hint: you can't go outside, work for a year, and return to L63 position while you're still waiting your GC.


Take your fancy new super-star resume to your country of origin and use it to get a better job offer. Let Microsoft know that you'd like to stay, but the opportunities are not what you expected. See what happens.

Or, stay here and be miserable.

Anonymous said...

The world wants a more diverse selection of OS choices

Totally disagree. 99% of computer users want a computer that "just works". They want to get on with life: send e-mails and IMs, edit photos, manage expenses, play games, and so on. Almost everyone I know - people plenty competent at daily life - who isn't a techno-dweeb could not care less what OS they run. They don't want to have to re-learn semantic or mechanic basics once they know them; they want to *actually do useful or fun stuff*.

I guess MSFT's challenge is figuring out whether you want to continue to do that, or whether you want to morph into some sort of eyeballs/web2.0 thing, or both; and if you can do both, I will be incredibly impressed.

Anonymous said...

I do not want to comment on the Yahoo! but I want to vent about the Seattle Times article today "Microsoft's proximity to Gates no longer key factor" http://seattletimes.nwsource.com/html/microsoft/2004183570_microsoftland15.html. I am not Bob Kaplan talked to but I am fairly certian the the rank and file employees want to be around the Redmond campus. My quick survey of my co-workers seems to support this. You can even look what happened in MSN. For months there was a campaign to move them from RedWest to the Advanta campus being built at 156th and I-90. They did a bunch of surveys and had comittities study it and in the end the MSN employees said that they did not want to move from the main campus area. The MBS team does not know this yet but they are going to end up at the Advanta campus. I feel bad for that division. Not being on main campus but in buildings 110 & 109 not a lot of people know about the Dynamics product line or the small business groups like Office Accounting or Business Contract Manager so it is hard to recuit into those teams. Just wait until everyone in MBS finds out they are moving South. If you live in Everett you just added a half hour to your comute. If you live in Seattle and took 520 every day to work have fun with the 405 to I-90 piece. Do you want to work out at the Pro Club or go to the company store well you just lost another hour out of your day getting to the main campus area and back to Advanta. Of course if you were a fan of the Connector good luck with that. I am sure they will have shuttle buses but will they run on time to make your Connector connection (not to mention at least another half hour each way to your commute). I bet people leave MBS just to take jobs on main campus again.

Anonymous said...

Here are some comments from a couple of articles:

"Not only does Jerry have a fiduciary duty to YHOO shareholders..."

"But we have yet to hear a plan that will persuade Yahoo shareholders to willingly take an instant 40%+ hit to their holdings on the hope that Jerry will be able to deliver even more value over the next couple of years."


What the hell about Msft shareholders??? Everything I've read about has been the concern for Yahoo shareholders. What about the 10s or even 100s of thousands of dollars some of us have lost due to this deal. Yahoo didn't lose jack. They got a huge undeserved bump in their stock price and if they're smart they should dump it now. We got the fricken' sh-t sandwich. And yet everyone feels sorry for Yahoo shareholders. We're the ones who are suffering. Our stock could easily be sitting around $32-34/share right now without this damn deal hanging over our heads. I don't get. We're the ones who announced stellar revenue and earnings growth and actually raised our FY outlook at a time when NOBODY is raising their outlook. What the hell gives? What about us?

Does anyone care to know what Yahoo's 5-year return is? Try 213%! Does anyone know what Msft's 5-year return is? Try 18%!

And somehow everyone is feeling an obligation to maintaining Yahoo shareholder value. I'm dumbfounded...

Anonymous said...

Not being on main campus but in buildings 110 & 109 not a lot of people know about the Dynamics product line or the small business groups like Office Accounting or Business Contract Manager so it is hard to recuit into those teams.

No, it's hard to recruit into those teams because they're not very interesting.

If you rely on main campus proximity to lure people into your organzation, I think it's fair to suggest that your organization has bigger problems than location.

Anonymous said...

The OS is history, at least as we know it. Crap, in 2025, computing devices are expected to be sentient.

Wow, sentient machines, huh. I guess we can all see what kind of person we're dealing with here. I suppose we need to get on top of online advertising right away so the sentient machines can click on the ads in 2025.

Granted, operating systems are mature products, but there are innovations and refinements to be made and money to be made. Saying that operating systems are done is like saying cars are done and we might as well not design new ones, or televisions, or cell phones, or pretty much anything that gets sold that works and that we're used to.

Anonymous said...

Totally disagree. 99% of computer users want a computer that "just works". They want to get on with life: send e-mails and IMs, edit photos, manage expenses, play games, and so on. Almost everyone I know - people plenty competent at daily life - who isn't a techno-dweeb could not care less what OS they run. They don't want to have to re-learn semantic or mechanic basics once they know them; they want to *actually do useful or fun stuff*.

I guess MSFT's challenge is figuring out whether you want to continue to do tha...


I'm sorry, I totally agree with your post -- I actually assumed it was self-evident -- but I have to laugh because you leave the reader with the impression that we (Msft) already do that. Do you really believe we deliver an OS to the market today that meets those requirements? I see this as one of the most fundamental mistakes we continue to make. We're more interested in figuring out what the next fancy feature or solution is than just simply making a product that is dead simple and meets the needs of most people in this world. We are completely clueless on the basic needs and requirements of our customer base. We had a chance to do something right with Vista and we completely fell on our face. We totally suck!!

Anonymous said...

I'm currently working on trying to explain to my wife why I need to seriously consider a $110K offer from a startup at the beginning of a recession, when my grant-augmented MS income is nearly $150K.

Glad to know I'm not the only one thinking like this. Recession is a great opportunity to find those easily overlooked gems.

Anonymous said...

Refresh your memory about why Microsoft bought Hotmail.

http://www.news.com/2100-1033-206717.html

Without that deal, I believe there would be no MSN today because most MSN users were at one point primarily Hotmail users.

Like it or not, Microsoft is in the online business now and really not an insignificant player. To grow this business, Microsoft's offer to Yahoo makes sense because each additional web user earns Microsoft ad revenue several times a day compared to someone who upgrades or buys Windows or Office once every 2 or 3 years, if at all. Worldwide, I bet most online users will never buy Windows or Office in their lifetime, but many will be online on Yahoo sites daily.

Anonymous said...

Yahoo is sinking, I see no reason for anybody to be buying Yahoo at this stage. You could buy four AMDs for the price of one Yahoo, and their revenues sure aren't that different. Microsoft is trying to come out of the 2nd rate software role by aligning themselves with 2nd rate search engines. The giants are dying. Great blog by the way.

Anonymous said...

Here's my observation of the talent at Microsoft:

(...)

So many of these people are just too difficult to work with. I've never had so many people who have either zero or very little skills in my specific area of expertise tell me how to do my job.

If your experiences are like mine, not only do they tell you how to do your job, they do so with a degree of absurd overconfidence while demanding that you pursue their blundering path. Meanwhile, they're quickly annoyed if you're not publicly aiding them in portraying themselves as seers.

We value the person who can answer the question the quickest - not the one who takes thoughtful time to consider all possibilities and align the best answer with our underlying principles.

I have always described Microsoft in a different way, but that statement matches my experiences perfectly.

Principles?? Hell, is that even a term that people use at Msft?

Only in amusing HR documentation.

Anonymous said...

>Without that deal, I believe there would be no MSN today . . .

And that would not be a good thing?

Anonymous said...

[i]If your experiences are like mine, not only do they tell you how to do your job, they do so with a degree of absurd overconfidence while demanding that you pursue their blundering path. Meanwhile, they're quickly annoyed if you're not publicly aiding them in portraying themselves as seers.[/i]

Sounds like someone who has worked for richl. How that guy moves up the chani, I'll never know.

Anonymous said...

I bet people leave MBS just to take jobs on main campus again. And I'd roll out the red carpet to get any such person OUT of my team. More space for people that actually care about their work ... thanks for the suggestion.

Anonymous said...

Folks, everyone pretty much fits into a standard 2x2. The first axis is risk tolerance: "risk-loving" vs "risk-averse" at the two ends of the spectrum. The second axis is capability: "exceptional" vs "sub-par"--this is relative to your peer group for a particular function.

Broadly speaking, there are probably very few "risk-loving" folks at MSFT. Once there were many of them, for sure, when the company had a lot more to offer and there was money to be made. Any new ones are just harvesting the experience MSFT has to offer before trying their hand at an opportunity with a bigger payoff--so it's a matter of time. Or they're just paid fat packages, which moves them to "risk-averse" "exceptionals." The risk-loving sub-pars aren't a problem b/c they will leave MSFT thinking that they're undervalued and reality will smack them in the face, sooner or later.

That will leave the "risk-averse" at MSFT. The "exceptionals" subgroup will need to hire someone to do the heavy lifting...so they can only get the "risk-averse" "sub-par" hired in any meaningful numbers. So, we wonder why we have such an issue with execution?

BTW, I'm not convinced that the "risk-averse" "exceptionals" are leading the company either...in fact, I don't think they are. What has happened IMHO is that the "risk-averse" "sub-pars" have risen to the top, they have been able to hire "risk-averse" "exceptionals" under the MSFT brand name; these folks have since become really disenfranchised, pushing them to be more "risk-loving," and therefore, they will eventually leave. No risk-averse person leaves MSFT.

This is not a MSFT phenomenon. This is a large company issue in general. It will happen to Google too.

Anonymous said...

Without that deal, I believe there would be no MSN today because most MSN users were at one point primarily Hotmail users.

I agree. The HotMail deal was a huge mistake.

Anonymous said...

Deep sympathy for all those mid level peeps at OSB. What a bunch of utter losers you all suffered under. Berko was obviously useless from the start - but it took them, what, two years to do anything about it? And all the marketing GMs before and since- how many of them actually had any REAL marketing experience (or skills)?Best hope was Martin whatshisname - why didn't they cling to him despite his HR violations? The Yahoo deal is just a sad indictment of MonkeyBoy and KJ's utter failure to select the right leadership - how much money have we wasted on obvious losers?

Anonymous said...

And I'd roll out the red carpet to get any such person OUT of my team. More space for people that actually care about their work ... thanks for the suggestion.

So because a person on your team doesn't like the extra time it takes to get to work either because of distance or traffic, you'd "roll out the red carpet" to get them off your team.

And am I correct in guessing that "rolling out the red carpet" is a euphemism for a PIP or other trumped-up performance related accusation?

You're part of the problem.

Anonymous said...

There is a very negative article in this week Barron's (16 Feb 08) by a money manager who thinks the deal ill-conceived and ill-fated. He notes that the market thinks the same as MS stock is down by about 4 bucks, or $40 billion. Which is the cost of the offer.

Personally, I'm an occasional Yahoo user and I'm worried that if the deal comes through, Microsoft will kill some of the most interesting features of Yahoo because they duplicate Microsoft's own: Yahoo Finance against MS Money for instance. Unless the strategy is to essentially pay to kill the competing products.

A few years back, MSN was very popular for a while, because of the chat and groups features. They were working well, too: the UI was snappy and easy to use. Sure, this was all about hooking up and sex but if you look at the FaceBook hoopla and other similar products, what are they about really?

In any case, this was drawing a big users crowd. They were using MSN and that's what it's all about: that's why the Co spent so much cash on the product. Microsoft couldn't wait to "clean it up", and so they did. With a flame-thrower... Repent, Sinners!!! Thanks to God and Microsoft, MSN is now squeaky-clean, and with a small user base it's much easier to keep it that way :-)

I'm not saying the company shouldn't have cleaned up: this is an outfilt that is ultra-Politically Korrect and this outcome was almost unavoidable. Maybe some manager at MSM had found a way to fly under the radar for a while and crank out a successful product.

All this is to say, maybe this web-stuff is not for stodgy PC Microsoft.

Anonymous said...

As a current softie, and a former anit-MSFT kind of person, I've given a lot of thought to this whole MSFT/Yahoo thing. Here's my take.

The issue can't be that we don't have the right people. We've got super talented people all over the company, so if we needed to pull from that angle, and search/ads were that important, we could do it.

And I don't think the issue is as much just trying to kill Yahoo outright. SteveB seems to be making his mark, and shaking up things by this move may have been a goal.

But then I got the email last week about the reorg and promotions. Looking through the list, I saw a bunch of names I recognized, like Soma, and, um, err... Ok, Soma was it.

And I thought to myself that the real issue isn't that we don't have the right people. Or the right opportunities. It's that the very talented people we hire can't do their jobs. They have so many layers of management to fight through, and no reason to be a team player, that I can't imagine what the incentive would be to fight through the crap to bring real change.

Acquiring Yahoo and all of the talented folks they have isn't going to fix this. The problem is that we can't keep up because of the management and crap layers of crap people have to swim through every day just to do their jobs.

Headcount isn't the issue. The real issue is the underlying reason we need so many people to get things done. And that isn't something that is normally addressed until a company is bought out.

So welcome, Yahoo'rs, if they do come. You'll be assimilated just fine. Just don't expect to get anything done while you are worrying about who your manager is going to be next week, what your team mates are plotting for review time, what your manager is plotting for review time, and how you ended up in that handbasket.

Anonymous said...

Mini,
Used to work for a big company and when I read this msft>yahoo information my first thought was: been thru this shiot before and it was never good. All it added was a new layer of buracracy that I as the end manager responsible for selling the company product and the failure of upper management for not using the company resources effectively.
We have based our company on your company to leverage (words you guy's like to use)our resources since we quit the company to start our own business. After 15+ years we have become somewhat successful and now with the Live offerings that are SOMEWHAT incorporated into our Office software to our Office Live account we can be SOMEWHAT more productive.
Damn shame that we can't be LOTS more productive. When we test betas for the above mentioned about 10-20% of POPULAR suggestions are included in the gold. Then we have to wait...
IMO, the proposed acquisition of Yayhoo is a MAJOR mistake when you already have the product in place.
Your MISTAKE is not MARKETING your products effectively. If I had some people beside me to market my products and services I'd fire their azzsz and the ad vendors! Jeez Louise, we do a better job of selling our stuff and we are a Mom&Pop operation.
We have to INNOVATE (another word you guys like to use) but ours happens daily to stay a step ahead of the competition. We can't AFFORD to not incorporate changes to our product/service on a daily basis.
THIS is what somebody somewhere there has forgotten...

Customer

Anonymous said...

And am I correct in guessing that "rolling out the red carpet" is a euphemism for a PIP or other trumped-up performance related accusation?
Nope my paranoid friend, "rolling out the red carpet" means being happy to see that person go and not opposing their desire to leave in any way. I'm not a ward, I don't run a prison, there are things called doors anybody in my team has the right to use. Now if you tell me you want to leave, I say fine: let me know how to help (and do help) and you come back whining a month later telling me NOBODY WANTS YOU (and you've done nothing in that month since "I am transitioning off so I really shouldn't take this one on") then I do hope it will show when I compare you to your peers, don't you? Otherwise I sure have a lot of under-performers to get rid of in my team: not being able to out-perform a disgruntled guy/gal that sat on his/her ass for a whole month ...
BTW and if this is being part of the problem you can bet I'm part of it!

Anonymous said...

Folks, everyone pretty much fits into a standard 2x2. The first axis is risk tolerance: "risk-loving" vs "risk-averse" at the two ends of the spectrum. The second axis is capability: "exceptional" vs "sub-par"--this is relative to your peer group for a particular function.

Absolutely. But you need to add in a third dimension: political ability. The real problem is when low-ability, risk-averse people who have high political ability use it to get in charge of the organization.

The number one problem of good management is trying to prevent this from happening. Alas, as you point out, in Microsoft it has, and with a vengence.

Anonymous said...

What has happened IMHO is that the "risk-averse" "sub-pars" have risen to the top, they have been able to hire "risk-averse" "exceptionals" under the MSFT brand name; these folks have since become really disenfranchised, pushing them to be more "risk-loving," and therefore, they will eventually leave. No risk-averse person leaves MSFT.

You said it! This is quite common in MSFT where the B's have somehow risen to the top and have an army of C's under them. Those C's are going out and getting D's and give them work meant for F's. How some of their projects get funded, I'll never know.

Some A's who fell into the mix because of the brand name just have to slug it out until they can jump. And when they do, hope that they land among other A's ... which is a scarce thing here lately. So they jump ship.

Ptri said...

I liked your post. Microsoft is a software company. They should focus on building software that make people's life easier. Yahoo is an internet company. I do not think that Microsoft leadership will be able to do justice after they acquire Yahoo.
Please read my thoughts on my post.