Ballmer Says Microsoft Breakup Not in Cards

Approximately a decade ago, Microsoft was continuously pressured by the government to break up its large corporation into smaller businesses. The government was hesitant about a monopoly forming and believed that smaller businesses would provide better competition for Microsoft.  The company was able to weather through the government's pressure and has til this day, remained as one entity.  Now the company faces the same question from a new face, its stockholders. 

At Microsoft's recent annual stockholders meetings, Chief Executive Steve Ballmer and Chairman Bill Gates attempted to calm the numerous investors who were becoming skeptical about their stock in the company.  Due to generally bland trends within Microsoft's stock, stockholders are wondering if the company would be more competitive if it broke down into individual businesses.  The rationale behind this is that the status quo set up of Microsoft is extremely centralized and Microsoft is unable to maintain such a large company while continually providing innovative and efficient products quickly to the public.  Arguably, decentralizing the company would allow stockholders to invest in areas of Microsoft that they believe are thriving as opposed to the company as a whole.  Therefore, hypothetically, when Xbox does well, stockholders won't feel the effects of poor Windows Vista sales.

The Chief Executive responded to the question of breaking up the company by dismissing it.  He indicated that now isn't the right time for the company to break up because it would reduce Microsoft's value by making it more difficult for the company to compete.  While the article didn't provide a warrant behind that claim, a rationale that was evident later in the article was that Microsoft's products are sold to both consumers and corporations, splitting up the company could potentially undermine their holistic ability to sell products.  Bill Gates, formed CEO and a current board member, shared Mr. Ballmer's view by claiming that the current company's structure allows for "a lot of synergy" between the company's research and branding efforts. 


Unfortunately, Microsoft's comments regarding the company didn't resonate well with the shareholders.  Much of their anger comes from Microsoft's inability to reignite its share price even though their recent operating system, Windows 7, had record sales.  Key analysts have indicated that there is unlocked potential for Microsoft to break up their company.  It could create a spin off based upon their consumer businesses that would be beneficial to the company.  There is a substantial amount of commotion regarding this issue  because Microsoft's shares have fallen 15% since the beginning of the year.  As Microsoft consistently competes with Google and Apple, they're slowly falling behind in sales.  One of Ballmer's solutions to their problems was a process of financial diversification that involved selling up to $75 million in shares this year.


Whether or not this process will work is unsure as of now.  With Google and Apple consistently producing new and innovative products, it will be an uphill battle for Microsoft to retain it's position as a leader in the tech industry.


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India Lost Billions on Wireless Sales

Recently an Indian government accountant found the telecommunications ministry's guilty for $38.9 billion in lost potential revenue for the government. The accountant noted that the distribution in 2008 used the same fixed rates for bandwidth as were used in 2001. This is crazy because of India’s recent economic growth through the past decade. The allegations over the mishandling of the spectrum allocation forced the resignation of Andimuthu Raja as telecommunications minister last weekend, the latest government official to resign under pressure.

This is such a huge issue because India is one of the largest future telecommunications markets in the world. India is the 2nd market behind the dominant Chinese market for wireless services. There was a miniscule four million mobile services subscriber in 2001 and as 2008 this number has skyrocketed to 300 million.

This issue has caused India more than just monetary losses but also a loss governmental respect. Simple errors like Gaps in policy implementation and not consulting the Telecom Commission were some of the crucial errors which caused such losses. This is going to be a major setback for this rapidly developing market which is going to have to reevaluate a lot in its telecommunications ministry.

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Apple Approves Google iPhone App

After rejecting a Google application for the iPhone, Apple Incorporation has finally approved of it. According to an Apple spokeswoman the application “was resubmitted, reviewed and approved and joins the more than 300,000 apps in the app. store.” The new Google application is called Google Voice and is currently available to download.

The application Google Voice allows to deviate calls made to the different phone numbers such as “home landlines, office and cell phones” to only one phone. However the Federal Communications Commission had in inquiry about this and asked Apple and AT&T Inc. whether AT&T had something to do with this decision, but it didn’t. The Federal Communications Commission was concerned on how Google’s application was to put its brand on the Apple device.

“Google and Apple are increasingly competing in many areas, from Web browsers to operating software for mobile devices and computers to mobile-device advertising.” However, both companies are somehow cooperating to each other. Mr. Schmidt, an Apple representative said the company recently renewed a deal in order to make Google the default Web search engine on its products.

The fact these two competitive companies are somehow cooperating to each other is somehow unexpected. However, I believe they both are aware that they are two very powerful companies and will probably be the ones leading the market soon, if aren’t already. Why do you think these companies are establishing ‘joints’ between them? Do you think they will merge at some time?

And the Fight Between Google Inc. & Facebook Inc. Continues

While Google Inc. stopped aiding Facebook with finding Google contacts as Facebook friends, Facebook is developing an email address. As the competition between Facebook and Google continues to rise, each company is encroaching onto each other’s “turf”. Mark Zuckerberg, CEO of Facebook claims that their “facebook.com” is more “fun and more valuable for people to use.

What’s going to attract customers to the new email? Well, will not only have the standard email, but it will combine that to instant messaging and cell phone text messages, and saving every message. Not only is it a three in one, Facebook’s messaging system will automatically create contact groups, giving priority messages to people who are you “Facebook Friends”

Some of the statistics of how Facebook is dominating are seen in the above image. Also, Internet users now collectively spend nearly as much time per month on Facebook as on Google's sites! Google now sees Facebook as a threat. Since Google and Facebook are going at each other's throats, are other companies going to create their own email addresses or something completely new to attract customers to them?

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Google to Give Staff 10% Raise

As the war between Google and Facebook escalates, Google has recently indicated that beginning in January, all 23,000 employees will be receiving a 10% raise.  This move is an attempt to prevent the defection of Google's staff to competitors.  Silicon Valley has been seeing an increase in heated competition for talent as both Google and Facebook are expanding their services and require a higher concentration of talented workers to satisfy the production needs of the company.  According to a recent study, approximately 10% of Facebook's employees are Google veterans and that number was gradually increasing.  Universities and graduate students who used to prospective applicants to solely Google are now looking to other opportunities within the Silicon Valley.  Google originally had a functional monopoly on high skilled talent for their services, but with the introduction and expansion of Facebook, potential employees have a wider array of choices for companies to work with. 

The Chief Executive of Google disclosed in an email that the 10% raise was implemented in order to lift the morale of the company's employees.  Specifically stated that they wanted to make sure that they "feel rewarded for their hard work" and to "continue to attract the best people".  While Google is notorious for the numerous benefits they provide their employees and the luxurious work environment they provide, a survey conducted by the Chief Executive indicated that salary was the most important aspect of Google employees than any other component of pay.  Other components of Google's pay include bonuses into their base salaries.  What's also interesting is that Google is moving a portion of employees' bonuses into their base salaries in order to allow employees to receive some of it within every paycheck.  This 10% increase provides a long-term benefit for employees as opposed to a short-term fluctuation in their salary.  Ideally, the raise will allow Google to sustain their employees for a longer period of time.

As both companies introduce new products, such as Google's rumored social network development, the need for high skilled talent will be essential.  Only time will tell which company emerges on top. 

RIM to Price PlayBook Tablet Under $500

Recently, we have heard companies such as Dell, Samsung and Apple in the tablet market, but we haven’t heard RIM, the owner company of blackberries. However, Research in Motion has announced they will launch the “PlayBook” tablet computer at a price under $500. The company attempts to first introduce their product in North America and then globally in 2011, claiming they see a lot of international interest.

Even though introducing a tablet is nothing new, the 7-inch “PlayBook” contains a new operating system built by QNX Software Systems. But what makes the tablet different from the rest is it will have “a one-gigahertz dual-core processor and also features front—and rear-facing cameras and the ability to do video conferencing,” probably what some people are feel the rest of the tablets lack of. It also supports Adobe Systems Incorporation’s Flash technology, making it better to play many videos and applications on the Internet.

According to Mr. Basillie, the company’s co-chief executive; they have no concern about the competition between Blackberries and iPhones or the competition between their tablet and the iPad. They say they still have a strong base that is still growing and believe it will grow faster as they introduce the new tablet. He added, "We just finished our third quarter now...we will be pass them [Apple] and we will stay past them.”

Clearly, RIM could not fall back in the competition and had to design a tablet as well. I believe their modifications might call the public’s attention more than what the other tablets do since more luxuries attract more. Also, I think Rim’s greatest fear in the competition is Apple. We all know how powerful Apple Inc. has become, but they prove to show it when the co-chief executive speaks; he feels pretty confident about the fact they overcome Apple Inc. However, according to Gartner Inc. the global market share of Apple increased about 2% more than RIM. RIM is also planning to introduce new smartphone models next year. I believe the company obviously follows their greatest opponent, Apple, and because of this they are trying to surpass them by modifying what once their opponent created.

Friendship Breakup Between Google Inc. and Facebook?

Google Inc. states that it will no longer fund contacts to Facebook Inc. Remember how you could import your Gmail contacts and have them as Facebook friends? Well, that’s not happening anymore. Google Inc. will no longer allow Facebook Inc. to grab Google users professional and social contacts.

We all admit that it was nice having Facebook doing the hard work of finding your Gmail contacts for you . However, Google is stern about no longer giving information until Facebook reciprocates. Especially since Google’s policy helped Facebook grow tremendously as it gave an immediate network of friends to the new Facebook user.

I am surprised that Facebook Inc. did not want to extend their contact information to Google Inc. However, now that Google and Facebook are social networking "enemies" it is expected that there will be even more ads displayed on both sites. I am also curious to see how well Facebook is going to do now without Google's help. Any predictions?

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Samsung Makes Push in Tablet Market

Recently there has been a new behavioral trend in the telecom industry towards tablets. This tablet flurry was originally pushed by Apple’s iPad. Currently the company is aiming for sales of its new seven-inch tablet computer to top one million units by year end and is looking to offer other sizes as it seeks a bigger chunk of the fast-growing market. Tablets of all sizes will begin to appear on this competitive landscape so Samsung is trying to make its stand in the tablet market sooner rather than later.

Companies in this industry often differentiate themselves in the market by exclusively distributing their products to certain service providers in select areas throughout the world. For example Apple in the past has given exclusive rights and access to the iPhone to AT&T. Samsung on the other hand has given exclusive right to sell the Galaxy Tab to Mobile operator SK Telecom Co, which also first had Samsung's Galaxy S smartphone in the domestic market in June.

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Apparently ‘innovation’ has been an issue for the cell phone business. Companies are already claiming for a better technologic network: 4G or fourth generation. The fourth generation is faster speed that will enable to watch videos and download big files. However, the argument among the different companies is a disagreement on what exactly is 4G.

T-Mobile claims it owns “America’s largest 4G network” while Sprint it is “bringing you the first wireless 4G network”. However, neither company is right since there has been no agreement on the definition of the fourth generation. “"They are putting a mask on 3G and pretending it's 4G," Matt Carter, head of Sprint's 4G business, said of T-Mobile's campaign.”

Partner Clearwire Corp. that runs a technology called WiMax builds sprint and T-Mobile has upgraded its network to a technology called HSPA+, supposedly to be better than WiMax. To all of this, however, AT&T is considered the most powerful company, which now is also attached with HSPA+. However, AT&T plans to move to LTE next year, which is considered one of the two companies qualified as 4G according to the Telecommunications Union. Today, Verizon is attached with LTE, therefore being the only big company that can claim their network as 4G.

The interest of the companies is to upgrade their costumers to more powerful phones that offer better service and more luxuries, such as better Internet service and downloading bigger attachments. This is why the companies are desperate to claim they support the fourth generation network in order to get more costumers. However, not until an appropriate definition for the term is defined, no company should say they support this network. It is not fair for other companies to claim something you don’t have since it will harm them. I believe this can become a serious issue because it is for what all of the companies are now fighting for. First, the definition of the 4G should be defined and clarified to the public, and then the companies should make sure they can offer everything to the public.

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Dell Agrees to Acquire Software Firm Boomi

Dell recently indicated that it intends to purchase the software firm Boomi.  This move symbolizes Dell's desire to expand its presence into various markets, specifically, the corporate technology market.  Boomi is uniquely important to Dell due to their ability to integrate web-based business-software applications to ensure data is effectively transferred between software utilized in remote locations and subsequently on site locations.  The article highlights how technology suppliers, such as Dell, have been trying to increase their portfolios in the data-center market.  It cites a key competitor, Hewlett-Packard, in which they recently lost a bidding battle to regarding the data storage maker 3Par.

The reason why this article is important correlates to an earlier post I had regarding HP's acquisition of McAfee.  A larger trend amongst telecommunications companies has been arising in which the importance of expanding portfolios, specifically in areas such as software expansion, plays a vital role to the business' growth.  Software is having an increased role in various aspects of life, ranging from military application to in-car entertainment.  This increased role of software necessitates improves in software technology in order to ensure the most effective and secure technology.  The Dell-HP rivalry shows how companies are drastically attempting to expand their market portfolios.  The end of the article indicates how CEO Michael Dell recently said in an industry event that the company was planning on announcing a cloud-computing acquisition which has spurred a market-wide speculation on potential targets.  This announcement shows that Dell has future plans for acquisition of companies that will strengthen their hold on the market.  Cloud-computing involves the shared resources, software, and information provided by computers and other devices, such as smartphones, on demand over the internet.  Here we see a unique application of their recent software acquisition.  Dell will potentially want to integrate Boomi's software capabilities with a cloud-computing company in order to provide effective information sharing technology that could bolster their growth.

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Dell + Boomi = Partnership

Amidst the trends in the telecommunications industry, Dell has been slacking. As we all have noticed, Apple is rapidly loosing competitors as more and more consumers buy Apple products (iPad, iPhone, etc).

Dell Inc. announced on Tuesday that it was going to purchase Boomi Inc; a business software firm. As noticed, Dell is trying to "boost its presence" in the technological market. Boomi Inc is a software that helps business-software applications to run their data smoothly remote locations. Boomi Inc. have a specific customer market - business men who travel especially to remote areas. However, with Dell's purchase, the target customer has expanded.

However, Boomi Inc. was not Dell's first choice. They wanted to purchase 3Par which was instead bought by their largest rivals Hewlett-Packard Co. Dell Inc has not disclosed any more information concerning the profits that they will be making once Boomi Inc. will be purchased. It is interesting to note that Dell almost to say forced itself to buy Boomi in order to stay in the competitive realm of the market. This shows that as more companies witness the sales of Apple products, they too need to invest and merge with other industry to make their domestic products attract more customers.

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