Microsoft in Talks To Acquire Ebay

thatedeguy writes "The NY Post is reporting that Microsoft and Ebay are in talks for the online auction house to join the Microsoft family." That said, the talks aren't going that well at the moment. From the article: " Sources indicate that the talks, while still active, have cooled somewhat in the last two weeks as executives considered antitrust issues. It is unclear what the full impact of yesterday's advertising and search alliance between Yahoo! and eBay will be for talks between MSN and eBay. One source close to the matter suggested the Yahoo-eBay tie-up would not stop Microsoft from pursuing the online auctioneer."

mmmm monopolies...

With MS already in trouble over abuse of market share, I can't see any anti-monopoly commission approving a buyout of this size.

Re:mmmm monopolies...

You make it sound like any anti-monopoly commission has any power in America.

Re:mmmm monopolies...

In what way is that anything like with bundling IE/Media Player in Windows while having a "monopoly" position in the OS market ?

Does Google have a monopoly in ANY sphere ?

Re:mmmm monopolies...

You said a lot of things, but I'm I didn't get any actual critcism out of it. By criticism, I mean anything Google should do differently than what it is doing.

That said, I agree with the underlying sentiment of your post - which basically boils down to "Google is in a position of great power." We all know that, and there are no laws against corporations being in positions of great power. This should not (in and of itself) be a cause for concern, because it is the nature of the market.

In the same vein,the reason Microsoft is such an issue for so many people is assuredly not because they have power. No, if that were the only problem, I would have no concern at all. The problem with Microsoft is that they abuse their power in one sphere to gain an unfair advantage in many other spheres, often stifling innovation (crushing smaller companies) in the process. The examples are numerous - the most obvious is IE's dominance purely due to it's inclusion with Windows.

I do not see this with Google. First off, Google doesn't even have a 50% share of the global searches. So your arguments about it being like Microsoft are premature to say the least. There is no indication that they will ever be a monopoly...it is simply too easy to switch search engines. If Google does something I don't like, switching is as simple as typing "yahoo.com" in the address bar of Firefox I would be very interested to hear any argument from anyone on this site regarding how Google would ever become a monopoly in the search market.

How long before google has to start opening up the algo for us to see or has to stat giving us the option to use some other search engines results?

Well, how about never? Why should Google open up their algorithm? It doesn't matter, the results are the results. If for some reason people believe that they unfairly favor some sites over others and the results are therefore less valid than Yahoo's, MSN's, Ask's or anyone else's, they'll just switch to some other engine. As for Google offering the option to see other engine's results? They already do: it's called DogPile [dogpile.com].

Now, Google is in more markets than just search - as you pointed out, they provide free downloadable software. You characterized it as "unfair" for Google to bundle software and release it free. Umm, why? I assume you're referring to RealPlayer, and my reaction is "So what?" RealPlayer was already available free. They're not forcing anyone to download their software...it's not bundled with some other product their selling, and most of all, each piece is available individually. Besides, when installing their bundle, it gives you the option to only install certain parts of the bundle! I'm really not sure where you were going with that argument.

Google is quickly becoming a search monopoly...

Really? I don't see that. I'd like to see evidence anywhere that this is the case. As I said, almost by definition, there will be no search monopoly because the cost of switching is almost zero to the end user. One search engine may one day dominate in the manner of Microsoft with Windows, but the opportunity to abuse that dominance will be very small. The moment people even have the slightest distaste for either the results of their searches or the business practices of the company, they will simply use a competitor. This is clearly not the case with Windows - many people dislike Windows, but they have so much invested in it that it makes it almost impossible to switch for non-geeks, and annoying even for the technically saavy.

Re:mmmm monopolies...

the most obvious is IE's dominance purely due to it's inclusion with Windows.

It wouldn't have anything to do with Netscape's browser sucking balls or Netscape trying its hand at the portal business at the wrong time or IE actually being BETTER at that time. You ignore alot of facts to supplement your own perceptions.

I do not see this with Google. First off, Google doesn't even have a 50% share of the global searches.

They have a little over 65% global. [hitslink.com] Your stats are for US.

You said a lot of things, but I'm I didn't get any actual critcism out of it.

That's because I didn't criticize. I merely pointed out that Google is well on its way to being the defacto search monopoly. I also gave parallels to what happened to Microsoft and what will happen to google.

There is no indication that they will ever be a monopoly

Its called a trend. [hitslink.com]

it is simply too easy to switch search engines.

It's simply too easy to buy an Apple or get a free Linux distro. The barrier to entry isn't the issue here, its the tendency of the user. The user doesn't want to switch search engines. Do you really think Joe enduser can tell bad search results from good? He is unmoitivated to switch.

As for Google offering the option to see other engine's results? They already do: it's called DogPile.

Google doesn't offer this, InfoSpace does. "They" is innappropriate here as it isn't Google doing it. Now, is there an option, yes. In the same way I have OS options, doesn't make MS any less of a Monopoly. Please don't try to blur the lines with semantics.

As I said, almost by definition, there will be no search monopoly because the cost of switching is almost zero to the end user.

And I said barrier to entry is not the defining point of monopoly, marketshare is. Googles trend since its launch has been increased market share every year. You assume the end user will know that there is a monopoly or will care. Thats alot of assuming to do. A monopoly in this case would be most relevant to the businesses involved with online components, not the end user.

Here's the thing, the end user you keep touting is Googles PRODUCT. Google uses search results to get the users and sell them to advertisers. You get a monopoly on that, there are serious issues that need to be discussed.

This is clearly not the case with Windows - many people dislike Windows, but they have so much invested in it that it makes it almost impossible to switch for non-geeks, and annoying even for the technically saavy.

This is only true of businesses, and that is quickly coming to an end with web standards used for integration.

The end user has less than $500 invested in Windows and plenty of options for Operating Systems. The problem is that they don't want to switch. They don't want to learn how to do something another way. That is a tendency of people, not any business practice.

Re:mmmm monopolies...

First of all, Google did not sue Microsoft over the matter you suggest. They publicly criticised them for it, but that was it. Second, Google are not (ab)using a monopoly in one area to try to gain a monopoly in another.

Microsoft have a de facto monopoly in the operating systems market. If Microsoft bindles a 'free'[1] web browser with their operating system, then they make it much harder for other browsers to compete. This is anti-competitive behaviour. It would have been acceptable for them to produce a web browser as a free download (since Netscape already offered a browser free for non-commercial use) and even for OEMs to bundle Microsoft's browser with their computers. It was not acceptable for Microsoft to penalise OEMs who bundled Netscape's browser.

Likewise, Microsoft now have a de facto monopoly in the web browser market. If they make their search engine the default in their browser, bundled with their OS, then they are using their monopoly position in two markets to attempt to gain a monopoly in a third. This is anti-competitive behaviour and should be criticised. Sure, the user can change it, in the same way that they can change the default browser. The point is that it is much easier for them not to, and the ability to do this is only available for the monopolist, not other members of the market.

Google's page defaults to Google's services, and that's fine. Why? Because Google (as of November 2005 - I can't find any more recent statistics) has 46.3% of the search engine market. While this is more than any of their competitors, it is nothing like a monopoly. If they had 80% or so, then it might be seen as anticompetitive behaviour to encourage Google users to use gmail and Google Talk. Well, except for the fact that these both use open standards and so anyone can interoperate with them.

[1] Free is quoted here since the cost is included in the OS, rather than it being truly zero-cost.

Re:mmmm monopolies...

My comments show no sympathy for MS. If you think no company has wielded MS' influence then you've never heard of the Baby Bells, Big Blue, Tyco or SAIC.

Re:mmmm monopolies...

eBay is not an auction site, it's an auction-style site =)

An auction has a legal definition, which eBay doesn't meet - that is : goods have to be available for physical visual inspection for at least 24 hours prior to auction time.

Auctions were used to return or disperse recovered stolen property (or just stolen). Once offered at auction, stolen property is not automatically returned to its owner should it be proven stolen later, unlike other stolen property.

This is why eBay describes itself as : "eBay, the world's largest online marketplace!"

and ... "Experience the thrill of placing the winning bid on an auction-style item"

Obligatory Joke

Bidding for Ebay starts at $8 billion, but you can Buy It Now for $12.5 billion.

Re:Obligatory Joke

They'll make up the difference with an astronomical shipping price.

doesn't make sense

why would Microsoft want to aquire a whole company when there's nothing eBay can offer that MS can't get by investing a few hundred million in them like they did with apple?

Re:doesn't make sense

Because eBay has something that can't be bought with money: "eBay" is the synonym for "online auction", just like "Google" is synonymous to "web search". That's the Holy Grail of brand recognition.

Re:ummm

But this admin does not care about legal or moral issues.

Has there really ever been an administration that did?

Re:ummm

The thing is, Microsoft always had a "Buy for product, not market share" mentality.

Almost all companies they bought have been startups with a really cool product ( Hilgreave, WebTV, Bungie...). As far as I know, Microsoft has never bought a Novell or a Lotus or a Compaq, they kill competition with hard work and/or unfair practices, but not with company acquisitions.

So when you see Microsoft thinking of buying eBay instead of developing an alternative and slowly increasing their market share( like they did with IE) you know they are very desparate and afraid of Google.

Oh, wonderful.

Microsoft, running eBay, PayPal, and Skype.

Reminds me of HotMail

MS will spend YEARS trying to dump the *nix servers out of Ebay ;-)

Re:no kidding

Prepare for slower uglier eBay & Paypal.

I'm sorry, but I REALLY dont think that is possible.

Investors would freak

Considering that eBay has a market cap that's 20% of Microsoft's, such an acquisition would probably cause a panic among investors and kill the stock. What they're more likely talking about is a partnership/alliance in certain areas.

Ladies and Gentlemen, let me introduce COMPETITION

IMHO this is great news.

1) It gives Google _more_ of an incentive to develop GPay and Googles Ebay (G-Bay?).
2) Now all 3 companies that we love to hate are all in one convient package (Pay-Pal, Ebay, MS)

This is Scary because:
Given the excellent security record that Microsoft OSs' have do we really want pay-pal tied into the OS? OR even worse if Microsoft thinks* you are not using a "Geniune" copy of it's OS, will it put a lock you your paypal account and/or deduct the amount straight from your account.
AND EVEN WORSE: This will make it _very_ easy for MS to start charging $xx/(day/week/month) for using Windows.

OMG the sky is falling! =)
Should make for interesting times.
(The Chinese proverb: "May you live in Interesting Times" is apt I think)

Microsoft already charges $xxx/mo

Microsoft has a program called SPLA (Software Provider License Agreement) that anybody who is a Microsoft Partner can join (becoming a Partner is basically filling out a form). There's a bunch of legal stuff you have to sign, but then you get access to their entire library, which you can then resell -- of course you're responsible for supporting it, but you pay MS (or one of their major contractors, like Software Spectrum) a fee per month for each piece of software you use. You can sell per-user 'subscriber access licenses' or per-CPU, unlimited-user licenses. The monthly fees you pay MS are pretety reasonable -- instead of buying SQL Server 2005 Standard Edition for $1500, you pay MS $3/mo/user and charge the client whatever you want. A lot of their commonly-used software is under $5/mo., and some of the more esoteric stuff is only a little more.

That fee includes free upgrades, so if I sell you a Windows license at $5/mo., you would automatically get Vista when it comes out. It's actually a very reasonable program, or at least it appears to be.

That explains this new category

I was on the eBay sight this morning and there's a new category labeled "Vaporware". It only had listings for advance purchases of Windows Vista.

PayPal?

I doubt Microsoft is after Ebay itself. I think - for Microsoft - PayPal (owned by Ebay) is the interesting asset here, especially considering their plans for subscription models.

Wow, I misread that...

I saw it as "Microsoft in Talks to Acquire Baby"

I need some coffee.

Microsoft getting ebay would be a nightmare.

Now imagine the possibilities... If Google acquired Ebay! : D

Possible Merged Company Names

It might just be possible that Yahoo! could get purchased by Microsoft as well. If they do, it gives us a wide range of new name possibilities to think about:

M$'s eYahoo!

M$baYahoo!

eYahoo$oft!

Ca$h

...most of these look like unsecure passwords...

I will stop

If MS acquires any sort of control over eBay/PayPal I will close out my accounts with both. No way I trust anything to do with my money to MS.

Re:I will stop

Actually, PP is subject to that same intense regulation and insurance. So no argument there. Essentially, PP is a bank, just one that's on the Internet.

Show me where in PayPal's user agreement it shows that your money is FDIC insured? Their ridiculous "FDIC passthrough protection" doesn't count because it doesn't protect you in the case of PayPal becoming insolvent, only the bank they invested your money in. Believe me, if PayPal declares bankruptcy you'll be the LAST person with a claim on getting your money out of those bank accounts. Don't be a fool.. if you have more than $50 (or some small amount you're willing to lose) in a PayPal account you're asking for trouble. I even unlinked my checking account from them a few days ago because I am simply not comfortable with such a fucked up company being able to drain any of my "real" money. The only thing I allow as a source of funds now is a credit card so I can fight fraud charges through the CC company. Sure, this mean's I'm "unverified", which is ridiculous since they verified my account via my bank account once, it should stay verified no matter what payment method I choose to use.

Ebay is a Sun Solaris site

Ebay runs on Solaris and has just bought new hardware from Sun.

We all remember (don't we) how long it took MS to convert Hotmail?

So either MS runs a Solaris based service for the forseeable future or breaks Ebay for months while they try to get it right.

Buy Yahoo! Now!

So what now, one fine day M$ will buy Yahoo! as well?

Hi cost to stop illegal MS Windows sales on ebay

I bet they're just trying to stop the illegal sales of MS Windows on ebay...

Microsoft Friendster

I wonder if then they acquire Friendster.com. Would it be nice if we have "MS Friendster, please login via your .NET Passports"?? :D

BSOD

Bid Screen of Death.

In the new Vista, after a crash, you have to have the winning bid before getting your crash dump.

Hey, it's in the New York Post....

...so it *must* be true! It's right next to the story about the bouncer accused of murder who likes Chaucer and Kung Fu!

Chris Mattern

Antitrust concerns a bit late!

Sources indicate that the talks, while still active, have cooled somewhat in the last two weeks as executives considered antitrust issues.

At the face of it, shouldn't it have come to mind BEFORE even beginning any talk? Is this a kind of trial baloon to test how compliant the authorities might be? Are they trying to prepare the minds for a different buyout that will appear more "reasonable" in comparison? MS should already have been split in different operations by now, OS and software, not that this is an absolute remedy, considering what happened with the Bells...

No interest in a content company?

From the article:

One source said Microsoft boss Bill Gates came to the conclusion that Yahoo! was more a content company than a tech company. This source said Gates has no interest in owning a content company.

This was confusing because "content" as an adjective means pleased. It is also sometimes used to refer to works of authorship other than computer programs. But in that case, what is Microsoft Game Studios if not "a content company"?

And how long would it be

Before Ebay had to stop using Open Source software and going with MS provided software.

Good god - if you think Ebay is mostly unusable now just wait and see what happens when the entire operating platform is switched to Microsoft products.

Microsoft has too much money

If Microsoft and eBay are indeed talking, it is proof that Microsoft has way too much money just sitting around. Microsoft will ruin eBay if they were too aquire it. I don't want everything to be either Google this and MSN that.

Later,
-Slashdot Junky

You can...

eBay's CEO: You can suck my tiny red-blue-yellow-green balls, Mr. Ballmer!

MS-Ebay

After our successfull buyout and pending merger with the United States Government, we at Microsoft believe this merger will only strengthen our products and provide our stock holders with more added value. :P

 

Skype on alternative platforms

CRAP -- this would mean no more Skype for Linux and OS X??? As someone living overseas, I depend on that to make calls back home.

And no, I will NOT install Windows.

And the first thing MS will do...

...is track down anyone trying to resell Windows or selling pirated copies of Windows. Once they eliminate that threat, they can safely declare victory.

If you can't beat 'em...

buy 'em!

Too bad

I've enjoyed doing business with ebay, but it would be over if there's a buyout.

Skype

Don't forget eBay now has Skype. That could get Microsoft into more markets.

MS

Man, MS is just trying to get a hold of a bunch of new business areas. Does anyone feel they should just stick to what has made them what they are? Windows? I mean, Vista needs to be secure, stable and highly functional. Work on that.

Never happen

Microsoft probably would not be able to afford eBay. I'm a shareholder of ebay myself, and the way I see it, I would need either:

$45 per share in cash
or
2.5 MSFT shares per 1 ebay share

Which means Microsoft is either going to have to issue $30 billion in debt and spend all their existing cash, or relinquish 30%+ of the ownership of the combined company to eBay shareholders.

I find it hard to believe they're willing to do either.

Now, if they want to buy Skype from us or something, that's a different matter.

Consider the source

This is the New York Post we're talking about folks. Famous for its headline "HEADLESS BODY IN TOPLESS BAR" and also for extorting money to kill negative stories about people. Don't place too much faith in the veracity of this story.

It would be fitting

MS would vault onto end-user level servicing big time. But the most prominent thing that makes this super-fitting is that Ebay as a Web Portal is just as shitty - or even shittier - than the Windows family is as operating systems. The whole smell of Ebay put's it right next to AOL and shady Sharespyjunkware vendors imho.

They deserve each other

Microsoft has earned scorn from customers for suing customers for reselling old/retired software "licenses," a crappy activation process, DRM, bucking established standards, and insecure operating systems and applications (and downplaying vulnerabilities until some script kiddie takes a proof of concept, implements it, and unleashes it). Maintenance is a headache, and many tasks require bringing the system down (e.g., "maintenance windows"). Not only that, but to appear competitive, they redefine common terms such as "downtime" for marketing purposes. Don't get me wrong; Microsoft produces some great products (in terms of feature set) but they libel and slander the competition to make themselves look better.

eBay has earned a reputation for having the world's worst customer service, not refunding charges when they should, and for unjustly cancelling users' auctions. They have been so atrocious that they have earned the moniker "feebay" from a large group of customers.

Therefore, in my view, Microsoft and eBay deserve each other.

There's a definite plus side to the buyout....

Maybe eBay will actually get a GOOD user interface. Say what you will about Microsoft, but their products are pretty slick looking, even if they don't work that great.

The problem will really come when Microsoft tries to port eBay into .NET :)

There's far more to it..

If Microsoft is successful in the acquisition of eBay, then they will in turn acquire Pay-Pal and Skype. I'm sure that's more of a "well duh" statement than anything, but think of what it would do to Microsoft's monoplistic nature.

The sale will go something like

A+++++++++++ Would buy out large web company to protect our monopoly again.

Ok

SIGH

Special eBay features for IE users only?

And if MS ran eBay, would there be special features only available to IE users? That would encourage eBay users to use Windoze instead of Apple or Linux.

Oh my...

Now there is a match made in hell. I can hardly even fathom this. But at least it might spur more people to move to something better.

Bill & Meg are at the opposite ends of spectru

Bill & Meg are at the opposite ends of spectrum. Bill has always belived in Developers and wants to Develop Products and Portals(After MSN was put into Windows group). Meg a deal maker doesn't understand product development and blew few billion dollars on a third rate product called, Skype.
Bill's merger with Meg would make MSFT priceless.

No Microsoft, you can't have Ebay. Not Yours!

In yet another attempt to take over something they know little or nothing about and fail miserably at it, The Borg now want to take over the worlds largest garage sale.

As a client of Ebay, I REFUSE to have my personal information in the hands of a company whose antivirus program lets in more viruses, worms, spyware, and solicitors, than it keeps out.

In fact, both Ebay dropped using Microsoft Passport (now Windows Live ID) a long time ago.

The only thing on Ebay that is not for sale is Ebay.

Only M$S platforms would work after awhile

Just looking at microsoft's previous endevors you just know that in a short time only M$S platforms would be able to successfully bid. PayPal would require M$S. They might have a kludgy way for Mac's to work in a degraded mode but linux and bsd and other os's just wouldn't work. That would include PayPal so you would not be able to donate to your favorite OpenSource Software writer or Blog.

Stop cursing eBay with the M word!

I think I'm having a nightmare! Say it isn't so! At least I'm hopeful that they don't succeed in the transaction. I, for one, would probably look elsewhere for sales of anything and distance myself from eBay, if the transaction effectively happened and completed. I am no fan of the M word, and I am hoping it won't happen, for the public's sake.

Re:God dammit Microsoft...

Embrace and extend, my padawan learner.

No they aren't

Microsoft makes large "enterprise" software packages. Google makes small tools that will probably never come out of beta. They are 2 different business models. Microsoft is a company lead by someone who really doesn't have a grip on reality. He's egotistic and doesn't like the success that Google is getting however right or wrong that success is and that's another discussion. MSN's search is such a small amount of Microsoft's income that it just doesn't makes sense that he would want to crush a search engine.

Google doesn't make an Operating System. Google doesn't make an office productivity suite. Google doesn't make a game console.

Under Ballmer's lead Microsoft is starting to fall apart. It's losing direction because of obsessions with beating Google for whatever reason. So what if Google has taken some of Microsoft's talent. That's the way it is in business. Particularly when employees smell the rot that is starting to consume Microsoft.

Either rate, Google isn't the needle to Microsoft's balloon, Ballmer's obsession with Google is.

Re:God dammit Microsoft...

Ex nihilo nihil fit.

Feci aliquid ex nihilo.