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Closing Microsoft
By John C.
Dvorak
July 12, 2004

Total posts:
65

Bill Gates is reported to have told more than a few people, when
asked how long he intends to run Microsoft, "Until it stops being
fun." This remark has always baffled me, since it's never been clear
what fun is for Bill Gates—or for Steve Ballmer, for that matter. Is
it fun to be publicly scrutinized, ridiculed, have pies thrown in
your face, and be sued left and right? Maybe not, but it's probably
fun to have private jets, red-carpet treatment, and billions of
dollars in your personal bank account. But once you have the latter,
why bother with the former? How about simply shuttering the
company?

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You have to wonder exactly where Microsoft can go from here. Is
it fun to run what is now a stodgy old company? I wouldn't think
so.

The concept of Microsoft possibly shutting down can be associated
with the recent announcement that the company is cutting costs to
save a billion dollars. With upwards of $70 billion in the corporate
coffers and many billions in the personal bank accounts of the CEO
and founders, you have to wonder what people at Microsoft are
thinking. Do they know something we do not know? The reason behind
the announcement has to be one of three things: Someone sees a rocky
road ahead, they are even greedier than ever, or they are planning a
shutdown.

The company is already saving a tremendous amount of money by
offshoring jobs and using cheap H1-B visa holders for U.S. jobs.
This is well documented. So what does Microsoft do with the profits
besides bank them? It talks a big game about R&D but its most
mundane product, the Internet Explorer browser, is full of holes and
is essentially a bunch of cobbled-together old code. Here's an
interesting exercise for you: Open Internet Explorer. Go to Help,
then About, and you'll see that Microsoft still acknowledges that
Internet Explorer is the old Spyglass browser based on Mosaic. This
was thrown together years ago. Then look at the copyright notice. It
ends in 2001. Unless I'm mistaken, that means that there has been no
real update since then, just patches. To get a bigger laugh, click
on Acknowledgements and see how long you can endure the laundry list
of people who worked on the code. It's as if the entire state of
Washington did some coding. Why?

The fact is this software, which has been mostly stagnant since
the marginalization of Netscape, is just coasting. So where is all
the R&D? I don't see it. In fact, I see the entire company
coasting along making more and more money with possibly one concept
ahead: to close down.

Yeah, I know that sounds ridiculous, but it wouldn't be
unprecedented for a high-tech software company to just end its life
cycle by closing. I recall the early days of microcomputing when
Processor Technology closed. Everyone thought they went broke, but
it turned out that the founders were just bored with the business
and closed. It has been done.

As this is written, the asset or book value of Microsoft per
share, including the $70-plus billion in the bank, is a fraction of
the stock price. But if Microsoft can knock down the stock price
with one or two dubious reports and collect another $50 billion or
so while moving everything offshore, it might be possible to pay out
the money to the shareholders and close the company. Just walk. If
everything is offshore, the shuttering would have no local impact,
since all the locals would have been laid off long before. Thus the
number of lawsuits filed against the company for shutting down would
be minimal. There is also the possibility of spinning off the
Office, MSN, Xbox, and Server folks into new companies for a
pot-load of cash. Make those divisions take on new names and close
down everything else while passing out the cash to everyone.

Of course, I realize that this whole notion is crazy on the
surface, but, in this scenario, all the principals would have their
money, houses, and cars, and would never have to worry about
Microsoft going into a pathetic decline, as most companies
eventually do. The closure would be one of the most interesting
episodes in the history of business. And who would complain? Gates
could get a few cheap shots in at the Justice Department while he
was at it. I think this is exactly what Microsoft should do. And
this scenario falls in line with the company's announcements on
cost-cutting.

With Microsoft shuttered, where would it leave the users? Most
users could coast on XP for three years if they had to. Perhaps
Microsoft could shut its doors after Longhorn comes out. Perhaps the
stable Win2K would emerge as the pass-around operating system of
choice, assuming that Microsoft would send all its OS offerings into
the public domain as one last slap at Linux.

Is this so very far-fetched? You tell me.

Discuss
this article in the forums.

More articles from John
Dvorak:
• Smear
Factor
• The
Dead-Media Bogeyman
• Closing
Microsoft
• 802
Eleven Heaven
• Comdex
R.I.P.
• more

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