This morning, when I read the headline “Microsoft is Dead,” indeed I shrugged it off and said: “good linkbait.” I had no idea who Paul Graham was, turns out he’s a successful bloke (then again, as ironic as it might be, I also did not have any clue who Dave Winer or what Scripting.com was for a good 2 years after I started blogging. Of course, when you operate 5000 miles away from Silicon Valley, you are allowed not to know some basic facts).
Point of the story is: Mr. Graham’s post did the trick: people came out on both sides, sending the post straight atop TechMeme’s main page. This goes to show just how popular TechMeme has become: we (bloggers and writers) sometimes seem to write for Techmeme and not for writing’s sake. Mr. Graham - an essayist - could have been less flash and more substance, but he chose more flash to get others excited. That’s actually a trait of a good writer, I suppose, I do the same occasionally and in no way is this a critique of Mr. Graham, rather, a critique of the blogosphere, and mainly, the massive drinking of the Web 2.0 koolaid and the forgetting of the crash of 2000-01.
Frankly, hearing “MSFT is dead” is akin to thinking that Amazon.com will buy Walmart in 1999. It was foolish then, stupid now. Saying MSFT is dead is ludicrous. I don’t even think MSFT is all that boring. I do think that there’s merit in MSFT spinning MSN.com into Yahoo!, but that’s another post.
Amongst those coming to MSFT’s defense is Chief Blogger Don Dodge, a few things caught my attention:
Microsoft is growing revenues at over $4 Billion a year and is on track for $50 Billion this year. I had no idea. I sold my MSFT shares last year after a nice 20% gain, thinking, the stock will be flat. That might be the case, but any technology company that can grow revenues by $4B is impressive, especially when it’s growing them to $50B. Google, for all of its swagger, has $10B in revenue, 99.9% from paid search ads. Over time, if Google’s P/E and P/S ratios will go down, that means its stock has considerable downside, whereas if MSFT can continue to boost revenues even slowly, it can better defend its market cap. Who will be dead then? Do note, that in the past, I have asked: will Google take over MSFT in market cap by 2010?
More importantly, Mr. Graham’s assertion that Google and Apple are “killing” MSFT might be plausible at face value, but Mr. Dodge does point out something worth touching on: “Microsoft is a software company. Apple is a hardware company and Google does consumer web search.”
What’s fascinating about that is that indeed, these three companies are in different core markets, but by the same token, increasingly they do compete head to head, be it Zune vs. iPod, or Live.com vs. Google.com, etc.
This leads me to wonder: over the next decade, will technology companies compete with one another more or less? In other words, will tech companies divest some units and focus, or are we seeing massive conglomerate type companies who essentially operate in numerous segments.
Now that’s the kind of topic I’d like to see go up on TechMeme.
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