Microsoft announced that it is paying $6B for aQuantive Inc today. Considering that it’s market cap was $2.8B yesterday, and that Microsoft is paying $6B for it, it’s clear that Microsoft wanted it pretty bad!
Microsoft said that they are “committed to earning a bigger slice of that market opportunity [online advertising]”. Currently, Microsoft’s slice is pretty small in that industry.
We all know what happened to Internet Explorer between 2001 and 2006. Nothing. That was because without competition, Microsoft was unmotivated. Firefox restored some of that competition, and IE8 is now in the works.
But with Vista just released after a grueling and painful 5 years of development, no operating system competition in sight, and Microsoft badly wanting to compete in a brand new market for them (online advertising), is there any hope of a significant, new operating system before 2012?
It’s not Microsoft’s fault. It’s human nature. Our nature is to always get bigger. No matter how big you are, you want more. And as you get huge, it becomes increasingly difficult to get bigger. In order to get bigger, they need another multi-billion dollar opportunity. Even though online advertising is completely foreign to Microsoft (Microsoft would disagree, I’m sure!), Microsoft wants this business, because it is one of the few that is big enough to be significant compared to Microsoft’s existing businesses.
It does make me think that users would have been better served if Microsoft had been split up many years ago. Sure, the Operating System division of Microsoft would be smaller, but they’d be focused on building operating systems – and there would be no distractions into the online advertising space.