The Mystery of Microsoft

Microsoft Corp. has had a long history of acquiring any software technology it deems necessary to compete in the marketplace — beginning with DOS, the computer operating system it purchased in 1981 from a Seattle company and then licensed to IBM Corp. to run the original IBM PC. But the Redmond, Washington, giant’s $44 billion bid for Internet rival Yahoo!, unveiled in February 2008, was different. Thanks to economies of scale, the gap between the Internet’s winners and losers was widening fast, Microsoft CEO Steve Ballmer warned in his letter to Yahoo!’s board of directors. Tacitly but unmistakably pointing to Google, he wrote, “Today, the market is increasingly dominated by one player who is consolidating its dominance through acquisition.” What Ballmer coveted most about Yahoo! was not its technology but its popularity among Internet users. 
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