Microsoft: Desperate for innovation?
How much for those startups in the window? For Microsoft, the answer is a cool $649 million.

That's how much the software giant spent on startups through its 2006 fiscal year -- more than three times the amount it spent in 2005, according to the Seattle Post-Intelligencer. How are those big bucks paying off? One recent acquisition, Onfolio, has already seen its blogging software released as Windows Live Writer, a product which has gained some positive Web buzz. Other deals are as much about attracting talent as acquiring products. Last year's acquisition of Groove Networks brought Groove founder Ray Ozzie on board, paving the way for Bill Gates to step down last month and give the chief software architect title to Ozzie.

But it's hard to calculate whether individual deals are paying off for Microsoft, since the company generally only discloses aggregate numbers for its startup spending. Microsoft CEO Steve Ballmer is exercising some caution, according to the P-I: It turned down a $500 million deal to acquire a company with less than $20 million in revenues.

But the fact that Redmond even thought about it tells you something about Microsoft's desperation for innovation -- despite its multibillion-dollar R&D budget.
Posted by Owen Thomas 10:20 AM 1 Comments comment | Add a Comment

Microsoft is big, fat, blind. They have always been buying and copying. Apple may have got the idea for GUI from Palo Alto, but they created the environment and made it better. Gates added a recycle bin which Apple "stupidly" sued for - and is starting to do AGAIN with "Pod" in the eco-system called iPod accessories.

Do we really think Gates left Microsoft so that he can spend more time doing philanthropy? Look, nice guy. We appreciate it. He walked away for one big reason. He sees Microsoft falling fast in the next 10 years and he could not see himself. Innovators innovate from the bottom-up. They attack the gorillas and take it down at the heels - chipping away bit by bit. Look at Microsoft's alter-ego personality. Search, Xbox, Vista, this, that, everything. And now with "ZUNE", they plan to kill the iPod. will take marketshare (maybe only a bit) but I doubt you will KILL the iPod. Apple could lose sight one day.

Google isn't innovating. It's Google Gadgets is a direct copy of Apple's widgets and Vista has done something similar - just hasn't released it. Copy copy copy. Everyone does it -- no one is innovating.

We're all living a dream. :-)
Posted By Alex B, Toronto, ON, Canada : 10:40 PM  

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