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Comments On Acquisitions

Our articles on the recent corporate acquisitions and mergers generated numerous comments and a great deal of discussion.

<[email protected]> writes:

I’m sure you will receive various messages commenting on your comments on monopoly in the computer arena and wishing for a model more like that of the entertainment (movie) business. Sorry to bust your balloon, but the movie industry is as consolidated and monopolistic as is the computer industry. The Reagan administration ignored the anti-trust laws and today studios own production, distribution, and increasing amounts of exhibition space. The independent cannot be truly independent as they must rely on the largest companies to get films out to the marketplace. Everything is in a mode of merger and consolidation with all the attendant difficulties, such as small, valuable projects falling between the cracks.

Alastair Sweeny <[email protected]> writes:

I like your analogies for software productions, but I think what is really happening is that software will become more and more commoditized.

We now see shareware that is the equal of the $500 programs a few years ago. For example, for photo work, I use the excellent Graphic Converter conversion program by Thorsten Lemke from Germany plus NCSA Image, both of which have all the features of an early Photoshop and more. [And for your FTPing pleasure… -Adam] /graphic-converter-178.hqx

My point is merely that there will soon be free and shareware produced by generous hackers that provide the average user all the features they ever need.

Where will this commoditization of software leave Microsoft and Novell? Content. That is why they are moving into providing information [note Microsoft’s multimedia titles like Encarta, Bookshelf, and Cinemania -Adam] and building global satellite networks that would seem to be out of their focus.

Dan Neuman <[email protected]> notes:

I wanted to make a slight correction to your note about Teledesic in TidBITS #219. According to a Reuters and New York Times report, Microsoft has specifically stated that they are not officially involved in this project. Bill Gates owns 30 percent of Teledesic, Craig McCaw owns 30 percent, and McCaw Cellular owns 28 percent. Although the project is estimated at $9 billion, most of the funding will come from outside sources, not the owners.

Nicholas Sturm <[email protected]> writes:

What worries me the most about the mergers of the biggies (and the swallowing of all the independents) is what I saw happen to the textbook publishing industry over the last decade or so. Companies that knew little of book publishing bought the decreasing number of publishing companies and soon we had a mass of almost-correct books. What was an error here and there? After all it was less that one percent incorrect. By modern business standards that was sensationally accurate – much better than the U.S.P.S.’s, "We get over 95 percent of the mail there in two days." But what happens to that remaining five percent?

Where I once selected a book by looking for quality; I now select by reviewing the parts I feel I know best. Then I assume the errors in the parts where I need the author’s help will be no worse than that where I can count the errors. Unfortunately – for my students – I can give them the "correction list" only for the parts where I’m confident of the best correction. They are left memorizing (and perhaps I’m left propagating) the mistakes in the other parts.

Pythaeus writes about Borland:

The rumor that I’m hearing is that Novell wants to buy Borland, but Borland’s bookkeeping is so bad that Novell can’t figure out what the company is worth. Supposedly Borland has been working with an accounting firm for close to a year to straighten out their books. My guess is that Novell, in its attempts to become Microsoft, will buy Borland as soon as feasible. These rumors come from a recent Novell conference.

David Lawrence <[email protected]> passed on the following comments (originally from his Online Tonight radio show) regarding the Aldus and Adobe merger. In relation to my comment about how many graphic designers I know use both FreeHand and Illustrator, David wrote:

You couldn’t be more on target. At a press conference following a CEO round-table at the Federal Office Systems Exposition here in Washington last week, I asked Dr. Warnock that very question: who wins here, Illustrator or Freehand? His response echoed your supposition; he said that the new company recognized that most serious illustrators use both products for different things, and that he foresaw no change in the lineup of either half of the new 1,200 pound gorilla.

I also asked him if there would be any attempt to bring in and further develop third-party translation software (such as Altsys’s X-Change) and he responded with definite plans of either purchasing those product lines and relabeling them under the new company’s banner or developing a new product in house.

As an aside, Michael Dell was also on the panel and spent most of his time pooh-poohing the importance of the PowerPC chip as used in the Power Macs. "With 93 percent of the market Intel based, why would we worry about what’s happening with the other 7 percent? It’s good for Apple as it extends the life of their line, which they sorely needed, but it’s not a market for us."

Much of the press conference was spent on the issues you brought up regarding mergers. Someone asked if the panel saw mergers as a continuing trend; most responded with the shake-out potential as being high. In fact, much was made of the fact that Ad Reitveld, CEO of WordPerfect, was not on the panel as billed. His press people noted "issues revolving around the Novell deal" as keeping him away.

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