Technology, Venture Capital, Private Equity

Perspectives from an Indian VC

Archive for May, 2008

On Microsoft’s search strategy

Posted by Arun Uday on May 30, 2008

Last week, there was an extremely interesting exchange of views on Microsoft’s search strategy between Tim O’Reilly and Michael Arrington. See:
Tim seems to think that MS’s efforts are directed in the wrong direction since search as we now know it is essentially a “done deal”. On the other hand, Mike argues that Google is headed towards monopolizing search, which portends ill as far as internet related innovation is concerned and therefore, MS’s attempts to break into search should be welcome by all. I would say, I will have to go with Tim on this one, and here’s why.

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Where’s the VMWare for the network?

Posted by Arun Uday on May 16, 2008

I was reading a post by Henry Blodget on how Google’s search income is beginning to close in on MS’s revenues from Windows, which is unnerving the latter. In the comments section, there were many who remarked, “Why should MS feel threatened? After all, there is no connection between the two.” However, the fact of the matter is that there is a connection, and nobody realizes it better than MS (the aborted Microhoo endevaour is proof of that) . Ever since the internet exploded as a phenomenon, there have been various attempts to reduce the OS to a “plug-in that will sit below network applications” as Marc Andreessen put it when he set up Netscape. Netscape, Sun and now Google have all sweated it out in that direction. And, surely enough MS has squashed all such attempts. However, Google seems to have attained a position that seems most threatening of the lot for many reasons – a)They have amassed financial resources larger than any other challenger in the past b)they arguably have a better engineering team than MS c)they have a disruptive revenue model, which MS is yet to gain mastery over. In short, they have everything that it takes to launch a serious attack, and that they seem to be doing via Google Docs and the rest. Read the rest of this entry »

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Microhoo – the circus has just begun

Posted by Arun Uday on May 5, 2008

Looks like the business world in the US  has taken a penchant for frenzied activity over the weekends.  If it was the Bear Stearns episode a few weekends back, it was the Microhoo – will they, won’t they saga unfolding in all its drama last weekend finally ending pretty unventfully with leaders of both companies calling off the deal and shooting out missives intended to give the impression that the outcome was in the best interest of its stakeholders after all.
And I should admit, I got this one wrong. Given MS’s dislike for being an also ran in any area of high priority for them, and Y!’s own trouble in getting its house in order, I had thought that there was no other choice, but for them to finally come together. I had dismissed the noises made by the managements of the two companies in the interim to be just posturing for valuation negotiations. And that indeed may still be the case.  In my assessment, the companies will probably keep the discussions going in the background (albeit quitely) and may just spring a surprise by announcing a deal some day when nobody was expecting one. The fact that the deal [fell apart] only on valuations (and even here, the gap doesn’t seem unbridgeable) indicates the willingness of both parties to have a discussion in principle.  However, there is a huge joker in the pack, and that is AOL.  If either MS or Y! decide to acquire AOL, all bets would be off.  Can’t wait to see how this game is going to unfold in the near future. Expect a whole lot of twists and turns in this tale before we get to the end.

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