Microsoft To Purchase 100 Web Companies Over Next 5 Years
by
on October 19, 2007,
Microsoft has shown a lot of interest this year in becoming a stronger web competitor. In 2007, the company has released a Flash competitor (Silverlight), unveiled a rival for AppleTV (Extenders), and significantly updated its Live search engine to better compete with Yahoo! and Google.
This appears to only be the tip of the iceberg, however, as Steve Ballmer proclaimed yesterday, amid a room full of spectators at the Web 2.0 Summit, that he has made plans to purchase 20 web companies a year for the next 5 years, totaling 100 acquisitions.
Not even Google has been this active in pursuing startups, so why does Mr. Ballmer seem so adamant about expanding Microsoft's web presence?
Although the Microsoft CEO failed to discuss exactly what he intends to accomplish, he did mention planning to spend between $50 million and $1 billion for each purchase, which would put the total to be spent somewhere between $5 billion to $100 billion. "Those will be good acquisitions, and they're important to us," Ballmer stated. "And they're of strategic importance."
He also encouraged all entrepreneurs with a web startup to contact him directly. “If you’ve got something to sell email steveb@microsoft.com."
What hopefully isn't happening here is a repeat of the past, when "Microsoft became famous during its hegemonic rule of the 1990s for engaging in negotiations with a start-up, and then pulling back at the last minute and launching an internal competitor," as Matt Marshall remembers. I mean, seriously… where would Microsoft even begin to start incorporating 100 new services within its network. "By declaring you are hungry, you get entrepreneurs coming to you to show you their wares — letting you get a glimpse of emerging technology even if you’re not going to buy it."
The company has already made 4 purchases this year, however, which may be a sign that Ballmer is very serious about this. These include the $6 billion purchase of marketing firm aQuantive, ad exchange network AdECN, and mobile ad company ScreenTonic., all 3 of which are focused around advertising. If these and previous acquisitions by Microsoft give any insight into what Microsoft is looking for, it is companies that can help the business aspect of Microsoft's web division because, as the Wall Street Journal has mentioned, "Microsoft will always have a voracious appetite for technologies that help its core software divisions."
With all of the money that is already being thrown at every web startup launched, Steve Ballmer appears to be doing nothing more than fueling the frenzy. I believe Chris Williams worded it best when stating, "What's the best way to inflate a bubble? Blow hard."
