Microsoft offers to buy Yahoo in $44.6 billion deal

It’s been rumored on and off for years now, but Microsoft just made an unsolicited $44.6 billion bid for Yahoo. The bid, which would consist of cash and Microsoft stock, values Yahoo shares at $31 a share, a 62% premium on Thursdays closing price. More analysis here. Yahoo has rebuffed Microsoft in the past, but this time the offer might be one they can’t refuse. The price of YHOO stock after the announcement indicates the market thinks there is a high probability of a deal. This deal is clearly about Microsoft not being able to compete with Google, and not being too happy about that. Ironically, I don’t think this deal will help them compete any better. On the other hand, Yahoo has been a huge friend to Open Source. In addition to things like YUI (which we use at LQ) and Hadoop, they acquired a great company in Zimbra. To me, Zimbra is one of the only real long term threats to Exchange. Unfortunately, I’m not quite as optimistic as Matt about the future of some of these Open Source initiatives if Microsoft were to take over. I’m not sure companies like Flickr,, MyBlogLog, Zimbra and others would have sold to Microsoft… and for good reason. The cultures at Yahoo! and Microsoft are just entirely different. Concerns like that sometimes go out the windows when $44B is on the table though. Long term, I think Yahoo could probably offer more shareholder value alone than as part of Microsoft. The market doesn’t really think long term anymore, however, and in the short term Yahoo is hurting.


Lessons from Google and Red Hat for Facebook and Open Source

Matt has articulated something I’ve tried to explain to people many times. From his post:

Twentieth century software business models focus on scarcity because they’re founded upon 20th century conceptions of property (actually, their origin is a few centuries’ older than that, but never mind).

Scarcity is the absolute wrong way to build a software business in the 21st century, with the rise of digitization. It is pointless and fruitless to insist that the digital world act like the physical or analog world, and build business models that conform to this false view. To thrive in the new software world, we need to embrace its changes rather than fight them.

The old model was to assume that the value was in the software itself and to therefore lock it up. It turns out, however, as Tim O’Reilly notes, that data is the real value, not bits and bytes. You don’t discover or, rather, uncover, that value until you have abundance.

There will be a few companies that continue to effectively monetize the old world. Oracle, Microsoft, IBM, and SAP, to name the four primary ones. But these outdated models will eventually fall against the rising tide of abundance-based business models, because the new models recognize that digital bits really do want to be free, and that all attempts to artificially lock them are doomed to fail.

It fascinates me how many companies still operate under the guise of artificial scarcity. The landscape is rapidly changing and the shift is so large and fundamental that it seems some are completely missing it. That’s not all that surprising in the end, but as with most industry paradigm shifts, at least one seemingly invincible player will almost invariably not survive.


Where's my Gphone?

Google finally made the highly anticipated Gphone related announcement today:

Despite all of the very interesting speculation over the last few months, we’re not announcing a Gphone. However, we think what we are announcing — the Open Handset Alliance and Android — is more significant and ambitious than a single phone. In fact, through the joint efforts of the members of the Open Handset Alliance, we hope Android will be the foundation for many new phones and will create an entirely new mobile experience for users, with new applications and new capabilities we can’t imagine today.

Android is the first truly open and comprehensive platform for mobile devices. It includes an operating system, user-interface and applications — all of the software to run a mobile phone, but without the proprietary obstacles that have hindered mobile innovation. We have developed Android in cooperation with the Open Handset Alliance, which consists of more than 30 technology and mobile leaders including Motorola, Qualcomm, HTC and T-Mobile. Through deep partnerships with carriers, device manufacturers, developers, and others, we hope to enable an open ecosystem for the mobile world by creating a standard, open mobile software platform. We think the result will ultimately be a better and faster pace for innovation that will give mobile customers unforeseen applications and capabilities.

It’s important to recognize that the Open Handset Alliance and Android have the potential to be major changes from the status quo — one which will take patience and much investment by the various players before you’ll see the first benefits. But we feel the potential gains for mobile customers around the world are worth the effort. If you’re a developer and this approach sounds exciting, give us a week or so and we’ll have an SDK available. If you’re a mobile user, you’ll have to wait a little longer, but some of our partners are targeting the second half of 2008 to ship phones based on the Android platform. And if you already have a phone you know and love, check out and make sure you have Google Maps for mobile, Gmail and our other great applications on your phone. We’ll continue to make these services better and add plenty of exciting new features, applications and services, too.

This is fairly inline with what I was expecting. While some were anticipating a hardware device from Google, a platform plus stack release makes much more sense. They don’t have to get into a very low margin high capital business and they can keep existing partnerships in place without the added stress of direct competition. This move should have fairly large repercussion for the entire industry. With the availability of a full SDK for this platform, Apple is really going to get hurt if they are too closed with their SDK, which will be released soon. Looking at the Open Handset Alliance members, you’ll notice both Nokia and FIC are missing. You have to wonder how this announcement will impact Maemo and OpenMoko, respectively. I’d guess we’ll see many more partners and stepped up competition as a result of this announcement, so I’ll keep an eye out and post an update when the dust has settled. One thing is clear, the Linux mobile landscape is heating up.

Additional Reading:
Linux Foundation (which has pointers to many of the Linux mobile initiatives and players, including: ACCESS, A La Mobile, Celunite, FST, Mizi Research, OpenMoko/FIC, Purple Labs, Trolltech, LiMO, LiPS, Moblin and more)


Some Stats

Every once and a while I like to post a quick update that includes some stats about LQ. Here are a couple for the month of October 2007.

* A total of 277 distinct Browsers visited LQ last month. Those with more than 1%:

Firefox 61.99%
IE 24.14%
Mozilla 5.50%
Opera 4.29%
Konqueror 2.18%
Safari 1.53%

Operating Systems
* A total of 23 distinct Operating Systems visited LQ last month. Those with more than 1%:

Windows 52.99%
Linux 43.09%
Macintosh 3.10%

Browser and OS combo
* The top 5 Browser/OS combos are:

Firefox / Linux 33.24%
Firefox / Windows 26.66%
IE / Windows 23.84%
Mozilla / Linux 5.33%
Opera / Linux 2.30%
Konqueror / Linux 2.30%

RSS feed
* The RSS feed with the most subscribers is LQ Latest Threads. RSS readers with more than 1%

Google Feedfetcher 77%
Google Desktop 10%
Firefox Live Bookmarks 3%
Firefox Live Bookmarks (Version 1) 2%
Bloglines 1%
MyYahoo 1%

* 95.51% of visitors had Java support
* 88.29% of visitors had Flash support
* 97% browse with a screen resolution 1024×768 or greater

LQ is certainly not representative of the web as a whole, but interesting nonetheless. Enjoy.


Open Source and the Future of Network Applications

There’s a lot to see at OSCON, so it should come as no surprise that you won’t be able to personally see everything you’d like to. I seem to have missed one of the most talked about events though.

“Tim has a television show under production where we get told in advance what we are going to say and how it will reflect Tim’s underlying idea,” Moglen told us. “I decided not to go with the program.”

Moglen’s performance turned into the stuff of legend.

Regrettably, we missed the assault. Stories needed to go out, and we assumed the chat would follow familiar, boring lines. After about ten people later asked if we caught the spectacular show, The Register contacted the OSCON audio staff to obtain a recording of the session. “No problem,” they said, “It will just take a couple of minutes, but you need to get O’Reilly’s permission first.” O’Reilly corporate refused to release the audio, saying it would cause a slippery slope. (We’re still trying to understand that one.) They, however, did add that Moglen appeared to be “off his meds.”

So what exactly happened?

Moglen attacked O’Reilly for wasting his time promoting Web 2.0 darlings, when he should be focusing on the core issues crucial to free software.

“I decided to say that we’ve reached a stage where we ought to be able to tell the difference between daily business news – X is up, Y is down – and the stuff that really matters, which from day-to-day is not racehorse X is running faster than racehorse Y.

“I think what time has done with this forum in general is to emphasize the trivial at the expense of the significant.”

According to published reports, Moglen described O’Reilly’s current approach to open source software as “frivolous.” He also chastised O’Reilly for chasing money, billionaire chums and “thermal noise” like Facebook.

“We still have serious problems to correct in public policies made by people propping up business models that were dying and wasting time promoting commercial products,” Moglen said, during the session.

As Stephen O’grady points out, you may not agree with the tactics Eben used (I also don’t), but the conversation is an extremely important one.

First and most obviously, this is a call to arms. Join us, pleads Joyent, before we trade one dictatorship for another. Underlying the recruiting attempt, however, are a set of implicit assumptions worth extracting.

1. Microsoft’s desktop dominance is threatened
2. The primary source of the threat is free but non-open source SaaS offerings from Google, MSN, Yahoo
3. The predicted outcome will see users forced to trade one dominant provider for another
4. Open source is the last, best defense against that future

Speculative and reactionary though these comments may be, they are reasonable enough in my opinion to be warrant further debate. But not here, and not now.

Suffice it to say, for time being, that the Joyent folks are not the only ones concerned by the prospect of future technology landscape dominated by the likes of Amazon, Google, eBay, Yahoo, et al. As evidenced by developments like Joyent’s decision and the GNOME Online Desktop efforts, it’s increasingly apparent that open source and Web 2.0 are on a collision course.

While these two dominant technical trends or directions have much to learn from each other, the convergence is likely to have its painful moments if OSCON is any indication. Indeed the talk of the conference was the somewhat shocking public swipe at Tim O’Reilly by one of the GPLv3’s chief architects, Eben Moglen. As documented elsewhere, Moglen absolutely dropped the hammer on Mr. Web 2.0, arguing that “that the FSF has ‘done the heavy lifting’ and ‘carried your water’ for the last decade, and that the era of Web 2.0 distraction (buzz about who is making money, who will get acquired, etc) will need to be replaced by a serious conversation about freedom.”

We’re still in the early stages of this discussion, but it’s encouraging to see that the right people are paying attention and the issues are slowly being iterated through. The right questions are starting to be asked. There’s still a lot to decide and much debate will surely follow, so if this is a topic that interests you (and it should be), make sure to join the conversation.


Clayton Christensen's Innovator's Dilemma says iPhone will fail

The iPhone has to be one of the most hyped devices I’ve seen in a long time. Many of the reviews so far seem to indicate that the device actually lives up to the hype, which is no small feat. It’s interesting to see that Clayton Christensen’s Innovator’s Dilemma predicts that the iPhone should fail:

Who or what do you think will disrupt Google (GOOG) or Apple (AAPL)?

It’s hard for me to see what will disrupt Google. I think they’ve got a pretty good run ahead of them. Chapters five and six of The Innovator’s Solution describe how at the beginning phases of the industry, in order to play that game successfully you really need to have a proprietary, optimized, end-to-end architecture to your product.

Apple sure has that.

That’s why they’ve been successful. But just watch the [competitors’] advertisements that you hear for the ability to download music onto your mobile phone. Music on the mobile phone has to be downloaded in an open architecture way from Yahoo! Music or someplace else [other than iTunes]. Which means it’s clunkier, not as good. Mobile phones don’t have as much storage capacity, nor are their interfaces as intuitive [as iPods]. But for some folks, they’re good enough, and the trajectories [of people using their phone as a medium for listening to music] just keep getting better and better.

So music on the mobile phone is going to disrupt the iPod? But Apple’s just about to launch the iPhone.
The iPhone is a sustaining technology relative to Nokia. In other words, Apple is leaping ahead on the sustaining curve [by building a better phone]. But the prediction of the theory would be that Apple won’t succeed with the iPhone. They’ve launched an innovation that the existing players in the industry are heavily motivated to beat: It’s not [truly] disruptive. History speaks pretty loudly on that, that the probability of success is going to be limited.

I’ll be heading over to the Apple store at about 6PM tomorrow to see if I can get my hands on ones of these. If I do, I’ll be sure to post a review here with my thoughts.


Google Desktop is now available for Linux

At the Linux Foundation Collaboration Summit, it was alluded to by a few Googlers that more Google Linux apps were coming “real soon now”. Making good on that quickly, Google just released the Google Desktop for Linux. While it is a native app, it’s not Open Source. It would be interesting to see a side-by-side comparison of this and Beagle (which I admit to not using). It’s good to see that, unlike in many cases, the Linux version looks to be an exact feature match with the Windows and OS X versions. At this point I think SketchUp and Notifier are the only two Google apps left without some kind of Linux version available.


Linux Foundation Collaboration Summit Update

It’s lunchtime at the summit and I have enough time for a quick update. First, a big thanks should go to Google. They are treating us extremely well and it’s fantastic that they do things like this. The last time I was at the GOOG campus was just pre-IPO, and a lot has changed to say the least. The SGI sign is even gone now :)

The conversation so far has been both interesting and very real. To me, those are key components of collaboration, which is what this summit is supposed to be about. Mark had it right when he said that the people in this room agree on far more than they disagree on. In the middle of a flame war, that’s sometime easy to forget.

A couple highlights from the discussion (kudos to the Linux Foundation for explicitly stating that the first day here is 100% bloggable):

* The crowd here is extremely varied with almost all major groups including vendors, coders, hackers, community, users, ISV’s and more represented.
* A data point I wasn’t aware of: somewhere around 1/4-1/3 of the actual Linux kernel code is in fact licensed as “GPLv2 or later”. This has some interesting implications.
* Some day, a dual GPLv2/GPLv3 Linux kernel may be theoretically possible. A GPLv3-only version will not happen.
* Both the GPLv3 discussion and the ATI/nVidia discussion is wearing a bit thin on many people…
* One reason companies like Motorola are so interested in mobile Linux (which is going to be absolutely huge from the looks of things) is that they have some measure of control over the platform. When you get a tome from the carriers stating what you must conform to if you want to run hardware on their network, having access to the code on your phone isn’t a luxury… it’s a business differentiator.
* For mobile Linux to really gain traction, it needs to be a consistent platform. If it’s not, content partners won’t be able to make the business case to support it. (ie. They want to support “mobile Linux” for their apps and content, not have to support each and every phone/carrier combo which run slightly different Linux variants individually)
* It would be a boon if bug reporting was easier, especially with regard to better communication and process flow between distros and upstream (confederation was mentioned).

A lot more was discussed, but alas…lunch it over. Should have another update at some point.


Linux Foundation Collaboration Summit

I take off for the Linux Foundation Collaboration Summit in about an hour. Really looking forward to the event. If you’re staying at the Wild Palms and would like to meet for a drink/chat tonight, I should be at the hotel by about 9PM. Feel free to send me an email while I’m in the air.


Linux Foundation Collaboration Summit

I’ve finally booked the trip to Mountain View for the Linux Foundation Collaboration Summit. I’ll be getting in on Tuesday night and will be staying at the Wild Palms Hotel, if anyone wants to meet for a drink/chat. It looks like quite a few attendees are staying at the Wild Palms, so it should be interesting. Really looking forward to the summit.