Steamd

CNET News writes about how Microsoft Chief Executive Steve Ballmer believes that Google Android is financially unsound for Google:

They can hire smart guys, hire a lot of people, blah dee blah dee blah, but you know they start out way behind, in a certain sense.

If memory serves, Apple also started out way behind, Steve. But just one software revision later and they are way ahead. Smart designers make smart products. Even if Google is a bit hit and miss on the first go-round, further revisions of their software can likely push them ahead. Where the hell is Windows Mobile in all this? Where’s the same level of innovation? I used a Treo 750w for quite some time. I don’t see it. Do you not have smart guys over at Microsoft, Steve? What’s your point?

I don’t really understand their strategy. Maybe somebody else does. If I went to my shareholder meeting, my analyst meeting, and said, ‘hey, we’ve just launched a new product that has no revenue model!’…I’m not sure that my investors would take that very well. But that’s kind of what Google’s telling their investors about Android.

That’s because Microsoft’s entire business model is completely different. Microsoft has not ventured out into the kind of business models as Google has. Thus, Microsoft has no clue how these business models actually work. Steve, I’m sorry but you just don’t get it. Until you get it you’re never going to be able to explain to your investors how such a revenue model would work. 

Google doesn’t exactly bubble to the top of the list of the top competitors we’ve got going in mobile. They might someday. But right now…

…Apple is at the top of the list of top competitors. Remember them, Steve? Remember what you said about the iPhone?

How’s that strategy working for ya? Steve, what you don’t understand is that design matters. It matters a whole lot. Apple gets it. Google gets it. It’s one of the main reasons why their business strategies are working right. They’re solving problems. They’re letting their products speak for themselves. What is Microsoft doing? 

I’m on the Windows Mobile site right now and I don’t see anything really revolutionary compared to what Windows Mobile was when I was using a Treo. Internet Explorer looks to be the same craptastic browser, incapable of browsing and rendering any site on the web like Safari on the iPhone or the Android Mobile Browser. You mean to tell me that a feature like that doesn’t matter? Plus, with ActiveSync available on the iPhone and reports of some solid enterprise solutions available for Google Android, the other benefits of Windows Mobile over other solutions is a bit moot. Granted, Windows Mobile 7 is supposed to address much this but…where is it? Just like Vista, delay after delay after delay.

Who’s way out behind now, Steve? Microsoft is. Sorry, Steve, you just don’t get it. Probably never will. Your best strategy is to retire now and put Microsoft in the hands of someone who does get it and is capable of taking your company in a better direction. Otherwise, just like Captain Ahab, you’ll end up sinking the good ship Microsoft in your quest to spear a great whale. Best of luck, Steve.

The more and more I look at the differences between Microsoft and Apple, the more I notice how much they mirror politics. I’ve written about this before (The Presidential Election: Mac vs Windows) and the idea that Microsoft is very much like the Republican party still holds water. Take the recent interview Steve Ballmer did for PC Magazine (Steve Ballmer: Microsoft’s ‘Head Coach’). My bullshit detector went off like a bandit and I just kept asking myself, “Am I reading a John McCain interview?” As Obama might say, Ballmer “just doesn’t get it”.

Ballmer was asked if he was concerned that Microsoft could lose some their Windows market share (currently at 90%). Even though PC Magazine already stated that Apple has an 8% market share, he answers with the following:

Today, Apple has much less share than that. They have about 3 percent of the market—a little less than 3 percent of the total market is Mac. We do our job right—not just Microsoft, we and our partners. I mean, because in some senses, the thing that really competes are Windows PCs against Macs. And Windows PCs come in various flavors and sizes and forms and shapes and price points. And some are good and some are less good. I mean, they’re all over the map. But part of the way we have competed successfully with Apple is not just on the quality of our software versus theirs, but the variety of experiences and choice that we and our partners, hardware vendors, device driver vendors, application vendors provide. And I still think choice—choice on price, choice on capability, choice on applications—I think choice is a big deal. And if we do it right, I continue to think we’ll do very, very well. 

Umm…no Steve, Apple has more than just a 3% market share. Apple had a 3% market share two years ago. Where have you been? In fact, since the interview went to press, it has been reported that Apple’s market share will likely reach 10% by the end of the year.

As the Merovingian said in The Matrix, “Choice is an illusion created between those with power and those without”. Don’t get me wrong, choice is a good thing. However, when it comes to PCs, choice is an illusion because you’re still settling for the one thing that separates Microsoft from Apple: the OS! Microsoft isn’t doing it right with Vista. I’m not sure if Steve understands that yet or he’s just using the whole choice thing to bullshit us.

When asked to justify the $150 price tag for Microsoft Office, Steve had this to say:

In the U.S., without tax, that’s the price I’ll quote because in some countries, the retailers mark it up, in some cases there’s value-added tax, so I’ll just say—we have basically a $100 product. And most people will own that product before they would buy a new one for three years. If you tell me that for $33 a year I get a product that is more capable, that actually reads and writes documents that other people create, that is compatible with what I might use at work and, oh by the way, everybody’s got a set of features that they really do use extensively.

Problem is, Steve, Microsoft Office costs more than $150 if you’re not buying the Home & Student version. When you consider that the Standard version alone costs over $239, it’s more like $66 a year for most people. And you wonder why people don’t upgrade more often than three years? Make a better product and lower the price and more people will buy upgrades. It’s that simple, Steve. As it stands though, all you’re doing is gouging customers. Office documents are practically a standard and, as such, many people feel they have no choice but to buy Microsoft Office. So much for the argument of choice, huh!

When asked about how Microsoft relates to younger people, Steve mentioned this in his spiel: 

I think the world of social networking is sort of barely scratched, and certainly if you look at it today and say what is—on a global basis—it’s ironic—but on a global basis, what is the most popular social networking offering? It’s actually MSN Messenger.

MSN Messenger is the corner stone of Microsoft’s social networking? Really? Really? What about Twitter? Facebook? So, IM and MSN Messenger are the lynchpin of social networking throughout the world? Wow, Steve, you’re REALLY out of touch. 

Finally, the topic turns to the Apple’s “I’m a Mac” and Microsoft’s current “I’m a PC” commercials:

I think they need a little bit of correction, and you’ll see us be much more vigorous about stating the case for the PC. The truth of the matter is, this is ironic. The PC outsells the Mac 33 to 1—32 to 1. And despite the fact that we don’t sell PCs, we only sell Windows to people who make PCs. And the attack is actually on the PCs, interestingly enough. You’ll see us defend the PC. We’re going to talk about why—look, PCs are better than Macs. That is not something that can be debated. 32 out of every 33 times, somebody buys a PC instead of a Mac. I’m not saying that there are not some things that people like about Macs, apparently there are. But have you ever seen a cheap Mac? No.

Saying that PCs are better than Macs is debatable, Steve. If it weren’t then Microsoft wouldn’t feel the need to spend $300 million trying to convince people that the whole “I’m a PC” thing is just a stereotype. Seems pretty clear that you and Microsoft view Apple as a threat and with damn good reason: they’re making a better product and it’s selling! Regarding that cheap Mac, what about a Mac mini? Granted, there aren’t any cheap all-in-one Mac’s out there…but what if one came out that was priced around $800? Would you be worried then? Umm, yeah, you would.

You know, they like to act like Macs are lightweight, there are much lighter weight PC notebooks. Macs—do they have the best battery power? Of course they don’t have the best battery power. Macs tend to have nice screens, but can you get nicer screens for a PC? Of course. Do Macs work in business? No, they do not. Can you get Macs made in your own country? Because in some countries, there’s a lot of sort of, you know, what do you call them? Import duties? Taxes? You can’t get Macs made in those countries, they make them basically one place in the world, and therefore they get even more expensive.

Never ceases to amaze me the crap that Ballmer comes up with to try and make Macs look like a shabby deal. Apple doesn’t make that big deal about how lightweight their notebooks are. However, the Macbook Air is about as light as they come. And battery power? Nice screens? Come on. Have you even used a Mac notebook for longer than 10 minutes? And taxes? Come on. You can do better than that.

Macs don’t work in business? Tell that to an enterprise shop that switched to Macs! I run my business on a Mac every day. Just because Steve Ballmer says it doesn’t make it so. Saying Macs don’t work for business is a myth and complete bullshit.

You know, there are so many—you know, can you find Macs in—I’m very sensitive to exactly what mouse I have on my laptop. Can you find a range of choices? Of course you can’t find a range of choices. You know, anyway—can you find the applications you want on the Mac? Well, you don’t really get full Microsoft Office. Everything from Apple is available, there are still tons of business applications and there’s games—anytime somebody does client software—over time they’ll do a Mac client. Maybe nowadays people do the Mac clients mostly to save time, but that’s only on the high-volume applications. So 32 out of 33 times people chose PCs, there must be something better about the PC, and that’s a story that deserves to be told. I think it’s a story of choice.

So, you mean to tell me that the mouse that Steve Ballmer is using right now won’t work on a Mac? I’m willing to bet that that simply isn’t true. I bet the mouse he’s using will work just fine if he plugged it into a Mac.

And you don’t really get a full version of Office? If that’s the case, then who’s fault is that? Oh yeah! Right! It’s Microsoft’s cause they’re the ones that created it in the first place!

And there are quite a few choices of software for the Mac. Pick any problem and I’ll guarantee you there will be at least two or three solutions to pick from. Granted, not everything is mainstream, off-the-shelf software but it doesn’t have to be. The developers who write software for the Mac would rather save the customer money and sell them online rather than charging more for boxed copies.

And yeah, there’s certainly a lot more choices for Windows software but that also means there is a lot of crap software too. More choice does not automatically mean better quality. And just because more people choose to buy a PC doesn’t mean that PCs are somehow better. If that were true then more people would be buying BMW’s and Porsche’s and such. People who care about quality, ease of use, and design buy Macs. For may others who simply don’t care or are too scared to go out of their comfort zone, they buy PCs.

It gets worse when he starts talking about Vista:

…market research says people who own Vista like it. People who don’t own Vista don’t like it as much. It’s interesting, it’s not the people who own it who don’t like it. The survey results are quite clear on this. Vista owners are happy with Vista, people who haven’t owned Vista yet wonder about it because it did get some early press and there were issues that we’ve worked through on compatibility.

Guess what, Steve? I’m a Vista owner and I don’t like it. And I’m not talking about early use here when these so-called “compatibility issues” existed. I ended up deleting the image off my hard drive and likely won’t start using it again till I absolutely have to. Who are the people in this market research? Are they people like me? What kind of users are represented in this research? If it’s anything like the Mohave experiment then your research is flawed. Only two-thirds of all businesses use Vista and there are plenty of people who don’t like Vista even after using it for some time.

When people are new to a product, they generally tend to like the interface of their old product. So the third thing people say is, gosh, I was used to XP, it was familiar to me, I’m not familiar—I think the user interface with Vista is a clear improvement, but I’m sure the publication you write for—if you guys change the front page, people don’t like it at first, right? So it takes some getting used to. But as people own it and use it, they like it. 

While that may be true most of the time, a lot of the changes made to Vista are so obtrusive and annoying that a lot of people aren’t “getting used to it”. People don’t want eye candy. They just want an operating system that is easy to use, easy to find things, and just works. While Vista is an improvement over XP in many areas it’s a failure in many others. Good product design is more than just eye candy. It’s about communication and solving people’s problems in an effective manner.

While Vista works for many people, others find it a hinderance compared to XP. I for one didn’t like the changes to the Control Panel. Compared to XP, it’s confusing and hard to find anything. I don’t like the organization and where Microsoft ultimately decided to put things. It’s a failure in usability because, even though I might get used to it, I still don’t like it and will still find it confusing now and then. And I’m a pretty smart guy. I can usually figure out things, others probably won’t. Other people might not be as observant as me. Your average computer illiterate Joe will likely have a hard time embracing and using the new control panel over the old one in XP. If I find it confusing you can be sure others who are less experienced than me will definitely find it to be confusing.

What I got out of this interview is that he probably hasn’t really sat down and used a Mac for any real length of time. If Ballmer and others at Microsoft were to force themselves to use a Mac for 3 months straight, they just might start to learn what it is that makes Macs such a good product compared to Windows-based PCs. Truth is that Apple is gaining ground because they are making a better product. Better design, better integration with the hardware, and a better overall user experience. If Microsoft could reinvent Windows to reflect a better user experience then they might just be able to turn themselves around. But until Ballmer and company starts using competitor products and starts understanding what makes them great then I don’t see that happening any time soon.

As evidenced in the current Presidential campaigns, leadership trickles down and effects everyone involved. It’s clear that Steve Ballmer doesn’t get it. He seems very out of touch with what’s going on with computer and the internet these days. Just like many Republicans, Ballmer and company tend to cover their ears and eyes and only hear and see what they want. One of these days maybe Ballmer will get it. Then again, maybe he won’t. And probably by that time, Apple will have gained a 20-30% share of the market.

Good luck, Ballmer!  You’re gonna need it!

I don’t think Steve Ballmer quite gets it. Obama owns an iPhone and even he gets it. Ballmer must run in the same camp as McCain. Funny how all these things are so relative.

John Gruber made some interesting points in his recent Memoranda blog post about the contrasting differences in leadership between Steve Jobs and Steve Ballmer. The leaked email memos from each CEO do show quite a few differences (and a few similarities). However, there is one aspect that Guber only touched on. The main difference I see between the two CEO’s is that one of them seems to focus almost exclusively on the bottom-line whereas the other focuses on the product. 

If you look at Ballmer’s email, one thing you’ll notice is that he never really focuses on the product itself nor does he mention what the company has done right with their products. Granted, this is just one email but I’ve read and heard a multitude of other things from Ballmer and he always seems to just glaze over the particulars about a specific product line with just broad brush stroke. He rarely if ever goes into detailed specifics as to why this product was successful and what makes it so great. Rather, Ballmer focuses more on the expansion of the company, it’s profitability, and stomping the competition. It just always seems like he talks more about how Microsoft is going to be doing this and that to get an upper-hand on the competition and much less about how great certain products really are. Maybe that’s just the kind of guy Ballmer is. Maybe he just doesn’t really care as long as Microsoft is profitable and is able to expand into different markets. Maybe he’s just a bottom-line kind of guy. Personally I think that sort of leadership isn’t doing the customer any good.

Jobs’ email about MobileMe, as Gruber mentioned, is very focused. He always focuses his attention on the product itself, what makes it good and what makes it bad. In the case of MobileMe, he focuses on the bad but ends on a note that implies a hopeful future for MobileMe, as if to say that he’s not giving up on it just yet. In the past, Jobs has talked about the bottom-line but usually when he does he attributes it to a specific product line. If Apple has a good third quarter he might say that it was because of the successful launch of the iPhone 3G and that customers were excited about getting their hands on them. Jobs tends to focus more on the user experience than just numbers. In his mind, if the quality of your products and the customer experience is good then the numbers will reflect that. Jobs is very much focusing his attention on the customer to create a unique user experience and I think the success that Apple is having reflects that.

One thing you’ll rarely ever see is a customer who switches from an Apple product to a Microsoft product due to some dissatisfaction. I don’t think I’ve ever seen anyone use a Mac running OS X Leopard for a good length of time who wanted to switch to a computer running Windows Vista. That’s the user experience for you and it’s something that I don’t think Ballmer will ever get.

On January 9, 2007, at the Macworld Expo, Steve Jobs unveiled a product that would forever change the landscape for cellphones: the first iPhone. Speculators ran rampant saying that Apple would likely garnish at least a 7% market share by 2016! What’s funny is that Jobs said that Apple would be happy with just 1% of the market, a market which at the time was already selling a 100 million phones:

So game consoles. 26 million game consoles were sold in 2006 worldwide, actually a little smaller than you’d think. It’s not such a big market. Digital cameras dwarfed it at 94 million. MP3 players 135 million. And PCs, about 209. Mobile phones, just about a billion last year, worldwide. So what does this tell you? What this tells you is, that 1 percent market share equals 10 million units. This is a giant market. One percent market share, you’re going to sell 10 million phones. And this is exactly what we’re going to try to do in 2008, our first full year in the market, is grab 1 percent market share and go from there. So we’re going to enter a very competitive market, lot of players, we think we’re going to have the best product in the world, and we’re going to go for it and see if we can get 1 percent market share, 10 million units in 2008, and go from there.

What Jobs didn’t say was that the market was already dominated by the Blackberry and Windows Mobile devices. Many speculators wondered if the iPhone could even remotely compete since it didn’t have any enterprise support nor any Microsoft Exchange support, the two things all businesses require out of the smartphones they buy.

Even Microsoft CEO Steve Ballmer couldn’t help but laugh at the iPhone:

Baller went on to say in a USAToday interview:

There’s no chance that the iPhone is going to get any significant market share. No chance. It’s a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I’d prefer to have our software in 60% or 70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get.

Ballmer would have to wait and see just how much market share Apple would get with the iPhone.

On June 29th, 2007, the first generation iPhone is released to the public. Right out of the gate, Apple sold an estimated 500,000 iPhones in just the first weekend, with one million iPhones sold by September. By the end of 2007, Apple sold nearly 4 million iPhones. Not only did they meet expectations, they exceeded them by capturing a 26.7% share of the smartphone market by the end of 2007. Keep in mind that they attained these numbers without enterprise support and on just a single carrier. It’s an amazing product launch on many levels!

Even then there were many who doubted the future success of the iPhone, still claiming that Apple could not keep up with their success without enterprise support and without the ability to install native applications. Well, their doubts were put to rest when, on March 6, 2008, Steve Jobs and company announced the beta release of the iPhone SDK as well as a first look of the iPhone 2.0 software. And what will the iPhone 2.0 software provide? You got it: native ActiveSync support for Microsoft Exchange!

By May 2008, Apple’s iPhone market share slipped a bit and fell to a 19.2% marketshare. My guess is that companies just aren’t ready to buy into the iPhone yet till they see the official release of the 2.0 software.

Another gripe about the iPhone was that it didn’t have 3G. Well, in true Apple fashion, they announced on January 15, 2008 at the Macworld Expo the release of the next generation iPhone, the iPhone 3G. Granted, the only things they added was support for 3G and built-in GPS, but it still pretty much closes the gap for any complaints that business users have.

So with all the hoopla, what is it about the iPhone? Why is this thing so darn popular? And does it really deserve all the hype and attention it’s getting?

As a fellow iPhone owner, I can tell you that it deserves all the hype. I used to administrate a good handful of Treo 700w’s and 750’s and I’ve played with quite a few Blackberry’s as well. None of them came close to the innovation and slickness of the iPhone. Simply put, Apple did indeed make one hell of a jump ahead of the competition. They created a phone that works unlike any other device of its kind.

Many other manufactures have tried to duplicate the success of the multi-touch interface of the iPhone but have failed. And why would they? Apple has had a history of creating really well designed interfaces for the past five years. Any company that even remotely wants to compete has to step up their game now and come up with something that is just as innovative. Even then, innovation is only a fraction of it. The other part is the fact that the iPhone just plain works.

The only real competition I see for Apple is Google Android, an open-source mobile operating system that some manufactures are already developing for. Android has plenty of potential but it remains to be seen whether it can capture the enterprise market. In many ways, Google Android will be the Linux of the smartphone market. I’m sure there will be developers creating apps that allow for such things as native Microsoft Exchange support.

So where does that leave the rest of the competition? Will Apple dominate the market and leave Windows Mobile and Blackberry in the dust? I don’t think so and I honestly don’t believe Apple will monopolize on the market either. After all, not everyone will find the iPhone to be the perfect fit for them. Some people will simply prefer a Blackberry, Treo, or some other smartphone over an iPhone.

I personally love the iPhone. And just because I’m an Apple fan doesn’t mean that I think the iPhone is the only good smartphone on the market. Again, I think Google Android holds a lot of promise. If someone was to come along with a phone that offers better features, a better interface, and more I might consider it. Apple doesn’t rule and know all; they just happen to be the one company who is designing some of the better products right now. Any company can come along and do it better. They just have to design something better.

As to what the future will hold for the iPhone and what the next big thing will be, no one really knows. Guess we’ll just have to wait and see.

Update [June 24, 2008]:

I share John Guber’s sentiments on the expectations of Google Android and how it compares to the iPhone:

My obsession is with wonderful, thoughtful software and gadgetry. I love the iPhone because it’s fucking amazing, not because it’s from Apple. It’d be fantastic if even one Android-based phone is as good or better than the iPhone.

The openness of Google Android is what makes me think it’ll end up being the Linux of the mobile OS market. And John is right, Android does have the potential of being better than the iPhone in many ways. After all, anyone with both Mac and Linux experience can see the potential of both platforms and the strengths of each. I don’t see why Android would be any different. But one thing is for sure: unless developers embrace the platform Android won’t stand a chance, which we won’t see till the first Android phones are released on the market.

Recently, Microsoft CEO Steve Ballmer described Vista as “a work in progress” at an annual Seattle event (InfoWorld, Ars Technica). I don’t know about you, but I find that statement quite disturbing. Let’s take a look at what Ballmer said and see if we can translate it a bit:

“Windows Vista: A work in progress.” [Laughter, applause.] “A very important piece of work, and I think we did a lot of things right, and I think we have a lot of things we need to learn from. Certainly, you never want to let five years go between releases. Can we just sort of kiss that stone and move on? Because it turns out many things become problematic when you have those long release cycles. The design point, what you should be targeting. We can’t ever let that happen again.”

Translation: Windows Vista: A failure in progress. A very important piece of works because, let’s face it, we never get things right the second time or fourth time. Why would the sixth time be any different? Actually it’s six years between releases, but who’s counting? Kiss my ass if you don’t like it. I know it took a long time but, you know, it’s hard to design this stuff. We can’t ever let anyone know that we don’t know how to design anything other than shit.

“Vista is bigger than XP, and it’s gonna stay bigger than XP. We have to make sure it doesn’t get bigger still.”

Translation: You upgraded and went from fat to obese. We know that. But diet and exercise won’t make it any smaller.

“So the desktop business, it’s our heart, it’s our soul, we continue to drive forward from this foundation.”

Translation: We know we can’t keep this up. So, we’re gonna try and buy up companies that aren’t a good fit for our core business, share a different philosophy, and does nothing but hurt the consumer. Three cheers for Microhoo! Woo-hoo!

Regarding the search market…

“There’s an opportunity to knock the socks off in terms of innovation.”

Translation: There’s an opportunity to kiss our competitors good-bye and innovate by stealing from them. Cause, you know, that’s just business.

“It’s virtualization time for Microsoft…We’re gonna make sure we democratize virtualization.”

Translation: We may be late as hell in the game but we’re gonna do for virtualization what Hillary Clinton has done for the Democratic party. We’ll lie, cheat, and steal our way to the top!

Imagine if you bought a brand new car, took it home, and within the first few weeks you noticed problems and annoyances. You filled it up with gas twice already after only driving a couple of hundred miles. Two of the tires have slow leaks. A weird burning oil smell keeps coming out of the A/C when you turn it on. The engine light keeps flashing at you telling you that your engine requires attention. The radio doesn’t play any CD’s except those distributed by Sony.

Now, imagine you took this car back to the dealership and was told that your car was a “work in progress” and wasn’t actually fully tested nor completed when it rolled off the assembly line. Would this be an acceptable answer for you? Would you put up with it? Didn’t think so.

Microsoft Sends Letter to Yahoo! Board of Directors

Microsoft CEO Steve Ballmer recently sent a letter to the members of Yahoo!’s board of directors basically telling them they have three weeks to make up their mind or Microsoft is going to get nasty. Here’s a play-by-play of the letter:

Dear Members of the Board:

It has now been more than two months since we made our proposal to acquire Yahoo! at a 62% premium to its closing price on January 31, 2008, the day prior to our announcement. Our goal in making such a generous offer was to create the basis for a speedy and ultimately friendly transaction. Despite this, the pace of the last two months has been anything but speedy.

That’s probably because your offer sucked, Steve. Not to mention that even at a 62% premium the offer is still undervalued. Price alone isn’t a valid measure of the value of this company.

While there has been some limited interaction between management of our two companies, there has been no meaningful negotiation to conclude an agreement. We understand that you have been meeting to consider and assess your alternatives, including alternative transactions with others in the industry, but we’ve seen no indication that you have authorized Yahoo! management to negotiate with Microsoft. This is despite the fact that our proposal is the only alternative put forward that offers your shareholders full and fair value for their shares, gives every shareholder a vote on the future of the company, and enhances choice for content creators, advertisers, and consumers.

So it’s all about the shareholders again? Where does my voice come into this? Do consumers have a choice in this? Didn’t think so.

During these two months of inactivity, the Internet has continued to march on, while the public equity markets and overall economic conditions have weakened considerably, both in general and for other Internet-focused companies in particular. At the same time, public indicators suggest that Yahoo!’s search and page view shares have declined. Finally, you have adopted new plans at the company that have made any change of control more costly.

The whole industry has declined. And the publicity surrounding your bully tactics and possible hostile takeover of Yahoo! hasn’t helped either. Yahoo! is doing what it can to be creative and branch out into other areas in an effort to expand their business and offer their customers more choice. Hmm…seems like a contradiction of that last sentence. In other words, only Microsoft can make the right choices and adopt new plans that give consumers better choices.

By any fair measure, the large premium we offered in January is even more significant today. We believe that the majority of your shareholders share this assessment, even after reviewing your public disclosures relating to your future prospects.

Again with the whole “It’s all about the shareholders” talk. This sort of corporate bullshit and old-school management style is what’s stifling competition, bub. Google is running off of a different mindset and different style of management and Yahoo! is doing it’s best to play catch-up. Best get with the program.

Given these developments, we believe now is the time for our respective companies to authorize teams to sit down and negotiate a definitive agreement on a combination of our companies that will deliver superior value to our respective shareholders, creating a more efficient and competitive company that will provide greater value and service to our customers. If we have not concluded an agreement within the next three weeks, we will be compelled to take our case directly to your shareholders, including the initiation of a proxy contest to elect an alternative slate of directors for the Yahoo! board. The substantial premium reflected in our initial proposal anticipated a friendly transaction with you. If we are forced to take an offer directly to your shareholders, that action will have an undesirable impact on the value of your company from our perspective which will be reflected in the terms of our proposal.

Your arrogance is overwhelming.

As I’ve said on my blog regarding this very thing, Yahoo! and Microsoft are two different companies with drastically different philosophies using completely different technologies. How these two companies can offer such superior value after the fact is likely to be an impossible task. If the Yahoo! board doesn’t see that then the company is surely sunk and they might as well let you gut it like a fish, Steve.

It is unfortunate that by choosing not to enter into substantive negotiations with us, you have failed to give due consideration to a transaction that has tremendous benefits for Yahoo!’s shareholders and employees. We think it is critically important not to let this window of opportunity pass.

Sincerely,

Steven A. Ballmer

Man, talk about a contradiction. Steve, you used to scream that it’s all about “Developers! Developers! Developers!”. Now, with this whole Yahoo! mess, it’s very clear that it’s all about “Shareholders! Shareholders! Shareholders!”. Makes me sick.

Boy, I just love it when Steve Ballmer opens his mouth and uses analogies. I read a recent Ars Technica article in which theres a comment made by Ballmer in response to a question on whether he’d like to improve Live Search by “smacking it on the back of the head”:

“Absolutely not. I would say ‘Hey, you know, you’re just three years old,’” Ballmer replied. “‘And we’ve got you in there playing basketball with the 12-year-olds, and you know what? You’re growing up quick, you’re getting better every day, and you’ve got all the potential in the world. If it takes you until you’re six, seven, eight, nine, 10—but you’re gonna dunk, and you’re gonna dunk every other guy some day,’”

Hmm…ok. So if Microsoft is three now and will be so much better when they’re 10 or 12, that means that by the time they get better and are able to “dunk” their search capability Google will be about 23. I don’t know about you but I can’t remember the last time I’ve ever seen a 12 year old beat a 23 year old professional NBA player. If that’s Ballmer’s idea of a business strategy then I can’t wait to see what he has in store for the rest of Microsoft. Should provide a lot of laughs for years to come.