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The Weekly Round-Up: 08.02.08
Ballmer: "Alright but, oh this feels so good."

By silicon.com

Published: Friday 08 February 2008

Once again, after one too many cinnamon cappuccinos, the Round-Up is transported behind the scenes of this week's momentous events in Redmond and Mountain View, California to see what might have been…

Redmond, Seattle. The office of Microsoft CEO Steve Ballmer. His PA Atkins enters.

Atkins: "You're in an ebullient mood, sir."
Ballmer: "We rock. We're rocking harder than anyone's rocked ever and that includes Bill and Slash at NES. And we're about to rock some more."
Atkins: "I salute you, sir."
Ballmer: "Woooo! Hoo! Woooo! Come on. Give it up for me."
Atkins: "Good grief, sir, please stop."
Ballmer: "Alright but, oh this feels so good."
Atkins: "Yes, sir. A $44.6bn proposal to acquire Yahoo! has certainly shaken the market up."
Ballmer: "Atkins, this deal lets us offer an increasingly exciting set of solutions for consumers, publishers and advertisers and allow them to be better positioned to compete in the online market."

Atkins: "That's what you told the press, sir. What's your real take on the deal?"
Ballmer: "We're screwing our detractors."
Atkins: "Yes, sir."
Ballmer: "But most of all we're putting the screws on Google."
Atkins: "Indeed. But what about Microsoft shareholders? Our share price has fallen since news of the bid broke."
Ballmer: "They'll recover all their confidence once I outline the masterplan."
Atkins: "Ah, I was going to ask whether there was one. So what are we going to do with Yahoo! once we've bought it?"

Ballmer throws his arms in the air triumphantly.

Ballmer: "Synergise!"
Atkins: "Good God, sir, you're sweating quite profusely (but rather not as much as these guys I hasten to add). Perhaps you should sit down for a moment and collect yourself."
Ballmer: "Alright. I feel so great. Pulling off the biggest deal ever is what I was born to do."
Atkins: "Not quite the biggest, sir."
Ballmer: "OK, so there was the AOL-Time Warner thing."
Atkins: "Indeed, sir. And we all remember how well that worked out."
Ballmer: "This is different. This time it's going to work. $44.6bn."
Atkins: "Yes sir, it's a very impressive amount of money."
Ballmer: "You bet it is, Atkins."
Atkins: "It's just a shame we're going to have to borrow so much of it."

Over in Mountain View, California, deep within the Googleplex, Larry Page, Sergey Brin and Eric Schmidt are seated around a Lego-covered table on unfeasibly large beanbags in Google's corporate colours…

Page: "So what are we looking at with this Microsoft-Yahoo! deal, Eric? Is it just about the advertising?" Schmidt: "Possibly... Hunngh!"

Schmidt shifts his balance and is instantly engulfed by his bean bag. Awkwardly he scrambles back to his position.

Schmidt: "As I was saying, it's partly about the advertising stuff but it could also be about the productivity apps we've been rolling out. Web-based spreadsheets, word processors, that kind of thing."
Brin: "But they're just some stuff we've thrown together for a hoot. We only launched them to annoy Microsoft. Anyway, they're all in beta."
Schmidt: "All our products are in beta, guys."
Brin: "But we're surfing the web 2.0 wave - perpetual beta - that's what it's all about, isn't it?"
Schmidt: "Nobody knows what web 2.0 is all about, Sergey."
Page: "Whatever, but mostly the Yahoo! takeover bid is about advertising isn't it?"
Schmidt: "Yes, the main thing Microsoft is gunning for is a big share of the web ad market. They're projecting the market will be worth $80bn annually in two years' time."
Brin: "Oh man, that's outrageous. What can we do to stop this? This is the internet. A place teeming with innovation and start-ups. If we fight them it'll be for a higher cause. Like we wrote on our corporate blog: 'It's about preserving the underlying principles of the internet: openness and innovation.'"
Page: "Yeah. Rock on, Sergey."
Brin: "Righteous. Do no evil."

The meeting is interrupted as a roller-blading product manager crashes into the glass wall of the office suffering multiple fractures.

Page: "Whoah! Wipe-out!"
Schmidt: "Dear God..."

Back in Redmond, Ballmer is outlining the grand plan…

Ballmer: "So, we'll acquire all the outstanding Yahoo! common stock and get started on the process of integrating our business cultures."
Atkins: "I thought Jerry Yang said that the Yahoo! board wouldn't be rushed. They said they'd be undertaking a deliberate review process and warned it could take quite a bit of time."
Ballmer: "Whatever."
Atkins: "I see. This is quite a departure for Microsoft, sir."
Ballmer: "You bet."
Atkins: "Historically, we're not known as a buying company. We've relied on our research and design organ to innovate."
Ballmer: "I needn't tell you what kind of organ I think our R&D is, do I Atkins?"
Atkins: "I would be eternally grateful if you didn't, sir."
Ballmer: "Innovation? Ha. Let's face it - the cupboard is bare. All we have is that table that turns into a computer that Bill loved and come to think of it I think we bought that, too. Anyway, innovation is old hat. You saw what happened with Vista. My innovation days are over."
Atkins: "So fleetingly?"
Ballmer: "What?"
Atkins: "Nothing, sir. I must say that your letter to the Yahoo! board was a stroke of masterful business penmanship."

Ballmer: "Thank you, Atkins. I did get a little help."
Atkins: "From the legal corps?"
Ballmer: "Better than that, I just wrote 'Dear Members of the Board...' in Word and the paperclip appeared and said: 'Looks like you're trying to write an unsolicited acquisition proposal. Would you like some help?'"
Atkins: "It is a most helpful avatar, sir."
Ballmer: "It is. Twenty minutes and just one system crash later and it was on its way to Jerry Yang and the rest of the Yahoo! yahoos."
Atkins: "Masterful, sir. When they wrote they rebuffed your original bid last February, what did they say again?"
Ballmer: "They said they had confidence in the 'potential upside' if 'management successfully executed on a reformulated strategy based on certain operational initiatives'."
Atkins: "And how did you phrase your interpretation of their 'potential upside' in last week's letter to the Yahoo! board?"
Ballmer: "'A year has gone by, and the competitive situation has not improved.'"
Atkins: "Beautifully poetic, sir."
Ballmer: "You bet my big, rosy ass."
Atkins: "You had to spoil it."
Ballmer: "I wanted to write 'that the company was stuck on its backside' but decided against it."
Atkins: "Advice from legal?"
Ballmer: "No that was the Paperclip again. Love that little guy."

Back in the Googleplex…

Page: "Wait. What if we try and make friends with Yahoo!?"
Schmidt: "Way ahead of you, guys. I've already spoken with Yang and his guys and offered another olive branch. I told them that as partners we could rule the galaxy together."
Brin: "Good call. Those guys love Star Wars stuff."
Schmidt: "It's a good point and it leads me to the crux of the issue. Guys, you've got to ask yourself why Microsoft is doing this?"
Brin: "Because they can't think of anything else to do?"
Schmidt: "I thought that initially, but surely they wouldn't risk $44.6bn just because they can't work out how to beat us? There is another possibility."
Page: "Which is?"
Schmidt: "Some reports online suggest the whole thing is a very cunning ruse."
Page: "I'm not liking this, what do you mean?"
Schmidt: "Any investigation into online advertising and search engine market by a combined Microsoft and Yahoo! will be forced to look at its relative position in the market compared with the dominant player."
Page: "And that would be us."
Brin: "Sweet. No wait..."
Schmidt: "'They may be trying to force the antitrust types to formally investigate the online advertising market and conclude that if they oppose the Microsoft-Yahoo! deal, then surely they'll be forced to acknowledge our currently unassailable position as the number one player constitutes a too powerful position."
Page: "Goddamn it, that's a scary bit of thinking."
Schmidt: "Yep. And from Ballmer, too."
Page: "And all along we thought Gates was the genius. Could it have been Ballmer all along?"
Brin: "Always two there are. A master and an apprentice."
Page: "But which one retires in July? The master or the apprentice?"
Schmidt: "Beats me but we're going to find out soon enough. There could be trouble ahead, one way or another. You'd better brace yourselves for tough times."
Page: "Hell. Maybe we shouldn't have bought DoubleClick, after all."

Back to Redmond.

Atkins: "Sir, I have to ask."
Ballmer: "Atkins?"
Atkins: "Is the real reason we've approached Yahoo! with an unsolicited bid actually an incredibly subtle plan to get the antitrust lobby to acknowledge Google's power over the online ads and search market? A staggeringly nifty bit of manoeuvring by a business leader hitherto thought to be a bit..."
Ballmer: "A bit what, Atkins?"
Atkins: "Let's just say 'someone who has hitherto benefited from the guidance and tutelage of an acknowledged business visionary'. Is it all a ruse? I have to know, sir."
Ballmer: "It's epiphany time, is it?"
Atkins: "Quite possibly, sir."
Ballmer: "Do you want the truth?"
Atkins: "I'm not sure I can handle the truth, sir. But go ahead."
Ballmer: "Lean closer."

Atkins leans in.

Ballmer: "No. It's just that I really, really need to beat Google and I can't think of anything else to do."
Atkins: "Ah, so it really is just a shortcut to innovation?"
Ballmer: "You bet."
Atkins: "Very good, sir."

Over in London…

For more chinwaggin' on the takeover bid, get an earful of the silicon.com podcast.

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