Infinity and Beyond

Figures just in from last week report that “Grand Theft Auto IV” has surged past “Halo 3″ and “Pirates of the Caribbean: At World’s End” to set the record for the biggest opening week of any entertainment product.”

Selling over six million units in the first week to gross over $500 million, ‘IV’ surpasses ‘Halo 3′ by $200 million. $310 million of it’s total gross came from the 3.6 million units sold on its opening day alone. It also helped that ‘IV’ was released on multiple platforms and not just Xbox 360 like ‘Halo 3′. While it’s hard to compare video game sales to the multiple windowed film format, it is easy to say that ‘POTC: AWE’ grossed a worldwide b.o. total of $960 million over a period of 19 weeks and ‘IV’ grossed over half that in one week.

I’m a big fan of the ‘Halo’ franchise as well as ‘Pirates’ but the GTA series is just not one I’ve been able to get excited about. Aside from the mature content, the style of game just isn’t my style. I don’t think Take-Two is really bothered by my lack of interest but it is interesting to see what content has brought about the ‘biggest opening week of any entertainment product’ ever.

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ZDNet News ran an article with details of NBC’s upcoming revamp of NBCOlympics.com and the goal of making it an online success, including live Web casts of the events plus archived footage.

The site will launch with an improved video player and other enhancements in time for the start of the 2008 Olympic games.  Over the course of the games, 2200 hours of video footage will be generated and accessible to users through both live and on-demand streams.  That’s good news for fans of various events that don’t get much, if any, television coverage.  Fully 25 sports are expected to be covered online which won’t really be seen on TV.

NBC hopes that the star of the Olympics will be Microsoft’s Silverlight, the web applications framework chosen by the company to power the new site.  It’s been in development for nearly a year now and is currently undergoing a number of UI tweaks.  They will be testing the site with live video during the Olympic trials.  The choice of Silverlight represents a win for the technology Microsoft has put forth to compete with Adobe’s highly popular Flashsuite.  

While choosing to use a Microsoft technology to power the site, NBC chose to go with DoubleClick to power the advertising, as opposed to Atlas platform which Microsoft acquired when it purchased aQuantive.  The Silverlight player will integrate with DoubleClick to display “dynamic ads” to viewers.  I’m assuming this will be your normal targeted ads, but perhaps they’ll be doing something new and amazing.

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The “Home” 3D virtual online space for the PS3 owners will be delayed until autumn, according to Sony Corp.  This is the second delay of the “Home” service, which I believe will be similar to the offerings Xbox users can currently access via Xbox Live.  The announcement is another blow to the PS3, which is trailing both Nindendo’s Wii and Microsoft’s Xbox consoles in unit sales.  It’s hoped that when (if?) the service launches, it will help to boost sales of the system.

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Your doctor visit may one day be powered by Google, much like your internet searching.  As reported at eFluxMedia, Google is going to expand it’s IT business into the medical arena, starting with 1,500-10,000 patients at a clinic in Cleveland.Patients who opt-in will have their medical records transferred to Google.  The idea would be to allow patients better access to their medical information, something patients are increasingly interested in and encouraged by their HMOs to do.What’s not clear is what Google stands to gain from this service.  Will Google sift through your medical records ala Gmail and provide small little Google Ads targeted to your past and present ailments?  Will there be a built in search tool tailored to medical advice?  And if you don’t have time to go to the doctor can you open up your Google medical info service, type a question into the box, and hit the “I’m Feeling Lucky” button?It sounds a bit intrusive to me, but Microsoft has already rolled out a similar service (yes–MS beat Google to the punch with their HealthVault service).   

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Using games developed using it’s XNA Game Studio 2.0, Microsoft announced today in a press release that users will be able to create, play, and peer review games developed by Xbox 360 users.Developers can download the XNA Game Studio 2.0 toolset for free.  In order to submit the games for distribution on Xbox Live, developers will have to join the XNA Creators Club ($49 for 4 months or $99 for 12 months).  Seven games created on the XNA platform were announced and should be immediately available for download from the Xbox Live Marketplace.  Other developers will get their chance to try out the release process in a beta starting this Spring.   It appears that games created by developers will be first peer-reviewed the game and content rated for appropriateness and conformance to the Terms of Service.  Once it passes, it would then be added to the Marketplace. 

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News Corp. is in talks with Yahoo! but analysts aren’t taking the bait. The idea is that a deal with News Corp. might send Microsoft running but in the end it is more likely that they’ll end up raising their bid price.  Ruport Murdoch has said that they are not interested in bidding on Yahoo! but that doesn’t mean they can’t give that impression anyway. It would be somewhat problematic for News Corp. if any kind of deal actually went though as a reported 20% stake in the struggling search engine would be a step backwards for the media giant. News Corp. already stepped into the interactive world when it bought Myspace in 2005 and doubled it’s web traffic to more than 45 million unique monthly users.

This news comes on the heels of the rejection of the bid by Yahoo! but before Microsoft has made its next move. There are also rumors still floating around about a possible Apple or Google interception of Yahoo! but nothing confirmed as of yet.

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As expected, the Yahoo board rejected Microsoft’s bid to purchase the company in a letter this morning. The board seems to be indicating an interest in the bid if the value were upped to $35-36 per share, or potentially as high as $40 per share (an amount Microsoft supposedly offered a year ago which was rejected at the time). The board said they are continually evaluating all the options to provide the best value for shareholders.

Despite the rejection, MS will not likely back down easily from the offer. Ben Romano from the Seattle Times outlined some possible responses the company has to the Microsoft rejection. The most logical first step would be to raise its bid. Another option would be to woo large Yahoo shareholders into seeing Microsoft’s point of view–which has reportedly already begun.

Moving into the more hostile arena, Microsoft could make a tender offer to purchase significant quantities of Yahoo shares, thus giving it temporary sway in the company. The most hostile approach would be to attempt to get a sympathetic board nominated to replace as much of the existing Yahoo board with pro-Microsoft votes. Then again, the company could just walk away, although most analysts see that as unlikely.

What I found interesting was the fact that Microsoft’s initial offer was both cash and stock. Given the recent decline in Microsoft shares since the announcement, the offer is now worth less and would actually cost Microsoft nearly double in terms of actual cost and depleted shareholder wealth. The declining stock price would probably have to be factored into any new offers Microsoft puts on the table.

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OK, so the last time I checked, everyone loathed the big bad software giant in Redmond. After last week’s surprise unsolicited bid for Yahoo!, everyone is up in arms praising how sweet and amazing this deal will be. How much it will spur innovation. How it will help to stop the evil Google empire.

Um, when did Microsoft stop being the evil empire and Google take the crown?

I’ve got to hand it to the MS PR department. Last year they bought aQuantive and breezed through regulatory approval. But they threw a fit and complained on the hill when Google dared purchase DoubleClick.

Now with the Yahoo! bid people are singing the praises of how great this will be. How right it is. Microsoft is almost playing it off as if it will potentially be hurtful to them, but if they must do it to stop the evil machine of Google then they’ll do it for the public good, even if it means cannibalizing their own businesses.

Google of course is not sitting idly by. They’ve fired back with a response of their own. Sure it would mean a lot for search.  But it would also give MS a near monopoly on the free email services and instant messaging.

Yet to hear people like David Kirkpatrick, sr. editor at CNN, say this will drive innovation (see: “Why Microsoft’s Yahoo bid makes sense”) just makes no sense to me. I can’t recall the last time that Microsoft was *truly* innovative.  And innovation is driven by a market with a lot of competition.  Microsoft isn’t competing–it’s trying to just stay in the game.  And somehow I don’t see a lot of innovation coming out of a group with just two major players in it.  That being said, at least Yahoo! took steps to keep up with Google in making their online email system slicker, unlike Hotmail/Live.  And there’s even been rumblings of Google enabling other companies to come in and block Microsoft’s bid with a counter offer, just to keep Yahoo! a bit more “independent” if you will.

I slightly dread the power this combo would give MS over the Internet.  Yahoo! has some of the most-trafficked sites on the net.   I really don’t want a Vista-like experience to be brought to my browser.  “Are you sure you want to Google that?”  “You’ve clicked on the link to access your email.  Would you like to give yourself permission to access your email?”  Seriously?

And lastly, they’re going to spend $44.6 BILLION dollars on Yahoo! (not counting all of the legal fees, acquisition costs, marketing, integration, etc. etc.). And they’ve identified $1B in savings. WOW! A whole ONE billion?? With $44.6B you’d think you could throw some darts at a pile of startups and find two or three which could generate $1B for you. And investors can kiss that sweet giant dividend payout goodbye.

I think it really should be settled with an arm-wrestling contest between Bill Gates and Jerry Yang.  If Bill wins, MS gets Yahoo!  If Jerry wins, Yahoo! stays on it’s own, and gets to take a baseball bat to the Hotmail servers just for fun.

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If this deal goes through do you think they’d change their name? What will Google try to buy once the deal closes? Themselves?

According to S. Ballmer “A year has gone by, and the competitive situation has not improved,” so it looks like they’ll keep doing what they do best. Buy the competition until they have none. As a product of Redmond, Microsoft’s home town, I have seen the company go from it’s original buildings in the middle of a forest to what it is now, a mini city. Wait, no, I take that back. Microsoft has become physically what it is operationally. A huge mess of piecemealed buildings and departments without easy access from one to the other. As the physical size of the headquarters has grown and diversified so too has the company, but in a bad way. The limited parking, the incredible traffic jam that it creates at 5:00pm when the entire crew heads home, and don’t forget about Bill’s notoriously bad driving, it all adds up to a lack of vision in the company. It has moved from innovative to reactive.

With the success of Google they have spent billions trying to catch up. Instead of working hard and truly revolutionizing the industry the way they once did Microsoft has become too big for it’s own good and can no longer produce anything of real value on their own. The best thing to come out of MSFT in the last few years would probably be the Xbox gaming system, but I only like that because it has Halo on it and that was developed by Bungie (which they bought and have thankfully let loose again). Everything from the Zune to the acquisition of aQuantive has been a defensive move.

Maybe if this deal fails they’ll have to go back to the drawing board and I can only hope the wipe it clean this time and start from scratch instead of just smearing around the colors.

You can see below the mess that it has become and what it will become. The company has more property North of this map and has broken ground in nearby Bellevue on their first high-rise. Also check out this ‘Incredibles’ inspired monorail system that has been proposed here.

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Viacom announced today that they would not longer have their online ads served by DoubleClick, and have instead signed a 5-year deal to have their ads served by Microsoft on their recently acquired Atlas network. The deal represents another win for Microsoft in the online ad wars.

Viacom sued Google $1B due to copyrighted videos posted on Google’s YouTube site, while Google maintains it has complied by removing copyrighted materials once notified.

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