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Corel Microsoft The Almighty Buck

Microsoft Writes Off Corel 409

PizzaFace writes "Microsoft resuscitated Corel two and a half years ago, paying $135 million for a quarter of Corel's equity ownership. Corel talked then about bringing its products to .Net, and even hinted that it might use its Linux expertise to port .Net to Linux. Since then, Corel gave up on the Linux business and isn't talking anymore about .Net, but is instead riding its XML hobbyhorse. So Microsoft is selling its stake in Corel to a VC firm for $13 million, taking a 90% loss on the investment."
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Microsoft Writes Off Corel

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  • Missing the point (Score:4, Insightful)

    by BWJones ( 18351 ) on Tuesday March 11, 2003 @06:14PM (#5488165) Homepage Journal
    The whole point of purchasing Corel was not to investigate Linux or any other option. Rather the goal was to kill it. Dead. Thus, eliminating any competition or furthering the prospects of important applications on competing platforms.

  • Well... (Score:5, Insightful)

    by 13Echo ( 209846 ) on Tuesday March 11, 2003 @06:15PM (#5488175) Homepage Journal
    Considering the fact that Microsoft killed Corel (WordPerfect) for the sake of its own products, I don't think that they really care about the loss. They've made more than enough to cover the extra 90%.

    Couldn't that be the real reason that they invested in the company? Microsoft always gets its fingers into the competition when they feel that they could be a threat.
  • by Bonker ( 243350 ) on Tuesday March 11, 2003 @06:15PM (#5488186)
    Certainly. I'm certain if someone walked up today and told the Microsoft board of directors that he could 'eliminate' Linux for 1 Billion dollars and could prove it, then they wouldn't blink twice before signing a check.
  • by $$$$$exyGal ( 638164 ) on Tuesday March 11, 2003 @06:16PM (#5488191) Homepage Journal
    And with the antitrust case against Microsoft settled, DeGroot added, "There's less of a need for Microsoft to show interest in keeping independent software vendors going."

    That's the heart of the issue, right there. So ironic.

  • Why corel is dying (Score:4, Insightful)

    by Tuxinatorium ( 463682 ) on Tuesday March 11, 2003 @06:16PM (#5488193) Homepage
    Corel is dying because their software is inferior. The only reason anybody ever uses it is because it's so dirt cheap. At Newegg, Corel office suite comes free with every purchase over $500. For a while, they were selling it for $10 a pop with free shipping.
  • by caino59 ( 313096 ) on Tuesday March 11, 2003 @06:19PM (#5488229) Homepage
    you and parent poster make a very valid point.

    for a company (and owner) that are worth rediculous amounts of cash....what is the price of eliminating the competition.

    A 90% loss over 2.5 years...122 million...
    thats only 50 million a year...

    wish i could throw away money like that ;oP

  • by BWJones ( 18351 ) on Tuesday March 11, 2003 @06:29PM (#5488340) Homepage Journal
    Corel is dying because their software is inferior.

    By this logic, Microsoft would be dying as well.

    The only reason anybody ever uses it is because it's so dirt cheap.

    Hmm. I thought this was part of the appeal of lots of open source stuff and Wintel stuff in general. It's cheaper than better solutions that may or may not ultimately cost more money.

  • Explain logic? (Score:2, Insightful)

    by Anonymous Coward on Tuesday March 11, 2003 @06:30PM (#5488350)
    Corel was on its way to going out of business without the Microsoft money. I'm not quite sure how the investment would kill them; it just means the Corel Linux stuff got sold off a bit later (when they sold it to Xandros) rather than earlier (when they would've gone bankrupt).

    What *does* make sense is wanting another major software developer to use .Net for its applications. It would lend credibilty to the .Net platform. And since there aren't too many major desktop application developers for Windows left (Adobe...?), Corel's an obvious choice.

    Not everything Microsoft does is pure evil.
  • Why not... (Score:5, Insightful)

    by nedron ( 5294 ) on Tuesday March 11, 2003 @06:31PM (#5488361) Homepage
    Now that MSFT has been let off virtually penalty free by the Bush administration, why bother to keep propping up a "competitor". Microsoft was desparate during the trial to insure that none of the competition dropped off the face of the earth, which would have added additional fuel to the penalty phase of the trial.

    Now that they don't have to worry about being punished, why continue shoring up companies like Corel? I wouldn't be surprised if they also drop their support of Apple (via Office X) for the same reason. They no longer have to prove that they're "good partners".

    Frankly, after the previous round of government litigation in the mid-nineties, the same thing happened. Once they were out from under close scrutiny the loosed the dogs of war.

    -David
  • by Anonymous Coward on Tuesday March 11, 2003 @06:32PM (#5488373)

    depends on what you're trying to do.

    corel draw is a screwdriver. photoshop is a hammer.

    if you try doing photo manipulation in corel draw, you're going to be hurting. if you try and do vector graphics in photoshop, you're going to be hurting.

    if your boss didn't understand this, then he's the tool.
  • by tomhudson ( 43916 ) <barbara,hudson&barbara-hudson,com> on Tuesday March 11, 2003 @06:33PM (#5488387) Journal
    Only a billion? I think they'd pay 10x that, and smile all the while.
  • Corporate Software (Score:2, Insightful)

    by Kirin3 ( 133278 ) on Tuesday March 11, 2003 @06:33PM (#5488388)
    Note: This is straight off the top of my head, this is opinion, but it's more of a pondering to me.

    It seems that far too much importance is given to WHO is making a software, WHO is on-board (or in-bed perhaps), WHO is going to buy, WHO is shipping, WHO invested in WHO...

    It seems corporate software is more about making market splashes than to provide a stable and sensible platform for future development of those projects. Money In, Money Out. Garbage In, Garbage Out.

    If the companies involved aren't about making a better software industry (and to avoid argument, let's say "better" equals "more thought out, more stable for the future of software and the industry than a company"), then the products they create won't make a better industry, no matter WHO uses them.

    Software has always been about HOW people use it. Not everything made was made for the largest audience, and not everything that is made for a niche audience hits its audience.

    Corel was a graphics software development company (remember CorelDraw?). It was far more about real-world transferrable graphics, signs, tshirts, etc.

    Why would anyone have expected it to get into Linux eventually, and even less would expect MS would ever buy into a company pushing Linux.

    I'm not surprised Corel doesn't do Linux even more. I'm even less surprised that MS bailed out of Corel.
  • by Ed Avis ( 5917 ) <ed@membled.com> on Tuesday March 11, 2003 @06:34PM (#5488397) Homepage
    Remember back when Corel decided Java was the future, and said it would be rewriting its office suite in Java?

    Then a few years later it was Linux. Asked by an interviewer whether the Linux thing was just a passing obsession for Corel like Java had been, a spokesman asserted that no, this was different, Corel was really committed to Linux.

    Then they got almost-bought by Microsoft, dumped Linux and started going on about .NET, again threatening to port the by now rather cobwebby Corel Office to the new platform.

    Now that too has gone and XML is the big thing? Whatever next?
  • by Jedi Holocron ( 225191 ) on Tuesday March 11, 2003 @06:36PM (#5488417) Homepage Journal
    90% loss or a $122m investment in their own products??? I think the point is that MS invested in Corel to kill it are accurate. I think many pointed this out when it first happened and predicted the demise of Corel to come...

    Well, here it may be!

    I personally prefer WordPerfect as a word processor application. I feel it is more intuitive, more versitile, easier to control, what not than MS Word. I hate Word. If not for WP I'd have died trying to write my masters thesis. MS doesn't have a superior product, they have a superior suite that most people use because it is on their machines when they get them. And hence it has become a default. WP & MS are not interoperable (and MS will keep it that way) and so WP has no chance at competition.

    Sorry, I rant now. WP lost and sadly I must now resort to Word because to many of my coworkers complained about all my files saved as .wpd and not .doc. But it's not because Word is superior.

    Carry on.

    The shortest distance between to puns is a straight line.
  • by Trepalium ( 109107 ) on Tuesday March 11, 2003 @06:36PM (#5488420)
    And, now that the anti-trust suit is over, there's no need for Microsoft to prove that they have any competitors. So, now they can dump Corel, and let them die their inevitable death.
  • Corel/Wordperfect (Score:5, Insightful)

    by bloosqr ( 33593 ) on Tuesday March 11, 2003 @06:38PM (#5488447) Homepage
    The death of Corel was due to Corel and no one else. They had what everyone wanted a well done office suite that was stable had been running for years on both windows and X platforms (The older versions of wordperfect had solaris binaries for instance). Even today, there is no comparision between wordperfect and koffice or even openoffice (though open office is improving). What Corel did, and I really find this unforgivable, was they got the brainiac idea to "sync" the two versions of the code base (X and window) by using wine! As a result wordperfect 2000 was basically an unusable piece of crap. It was horribly buggy and crashed so often that the corel newsgroups encouraged people to stick w/ free wordperfet 8. Corel jumped on the bandwagon (linux desktop) a bit too early and they simply fucked up on the delivery. People *WANT* a usable linux desktop. but the office suite actually has to *work*. Lets put it this way, walmart is currently selling walmart linux boxes by the droves right? How much more lucrative would it be to sell those things w/ an existing, commercial office suite thats actually been running for ages? Even businesses would find wordperfect far more usable than open office for windows->linux secretarial conversions.

    In any case converting to wine was as stupid as rewriting wordperfect in java (which apparantly they tried to do). If they had gotten a decent set of coders to keep a native unix set with decent wrappers they could easily have grabbed the market. The conclusion they drew from being burned by the linux sector (i.e. non selling product) wasn't the wrong conclusion because essentially they were selling a broken, nonworking product that they had no idea how to support.

    -bloo
  • by IWannaBeAnAC ( 653701 ) on Tuesday March 11, 2003 @06:42PM (#5488484)
    The real thing that killed Corel was incompatibility with Office.

    If Corel had jumped up and down sooner about M$'s file format shit then maybe Corel would still be triving.

    On the other hand, it is more likely it would have just led to M$ destroying them a bit sooner.

  • by The Bungi ( 221687 ) <thebungi@gmail.com> on Tuesday March 11, 2003 @06:48PM (#5488551) Homepage
    Mwahaha. Corel was one fsked up company. They were irrelevant right after they released Draw 4.0, which bombed big time. People just didn't upgrade from 3.0, which in contrast was a great product that made them what they were in the early 90s. By the time 5.0 came out, it was too late as people moved to other products and the "desktop publishing revolution" started to die out. Ditto Aldus (although not because of crappy quality).

    From then on they tried just about anything Cowpland could dream of, including moving to Linux (yeah, there's a core business focus for you). They practically killed Wordperfect by themselves, even before Microsoft took equity in them. By the time Word 6.0 was out, WP was dead in the water anyway.

    But, I like your FUD. It's poetic.

  • by Anonymous Coward on Tuesday March 11, 2003 @06:49PM (#5488567)
    You guys are missing the point. Microsoft didn't kill Corel, Michael Cowpland (former CEO and flamboyant goofball) killed it. He (a) bought the Wordperfect suite after it stumbled badly with windows; (b) rewrote it all in java; (c) rewrote it all for Linux; (d) bought the Xerox Ventura suite; and (e) declared war on microsoft.

    Mikie has some problems. Like god complex. And a show wife who wore slinky outfits and threw huge parties. He sent a postcard out to people with his blonde babe wife sprawled over his lamborghini.

    Corel began as the first high-end graphics package provider for Windows 3.0 (actually it started with hardware, but graphics made Corel an international company).

    If Mikie had kept his eye on the ball and stuck with graphics with an increasing emphasis on web and perhaps looking into media, streaming video, backends etc, it would never have gone down the rathole of wordprocessing suites.

    The new CEO seems to be concentrating on graphics again. Maybe he can get somewhere.

    Microsoft only became relevant because Mikie didn't stick with core competencies.
  • by mcc ( 14761 ) <amcclure@purdue.edu> on Tuesday March 11, 2003 @06:56PM (#5488638) Homepage
    I think the thing to take away here is to remember what happened at the end of each of these crazes.

    As far as i can tell, Corel has never once followed through on any of these buzzword projects. They get *something* in the hands of consumers.. they never really *commit*.. they spend lots of money.. then they get bored, wander off, and dump the thing like it never existed sometime well before the point at which the inclusion of the buzzword would begin to make sense.

    Like the java thing all those years ago. They got their office suite *working* in java. I tried it. It was buggy and it was slow, but it was beta, and it was *there*. But, from my perspective as a mac user-- well, first off, running it was a bloody mess, you had to bugger about with .jar files. They didn't bother doing the application encapsulization thing on any platform, you had to run it in a browser or appletrunner ultimately if i remember right. But that's just a lack of polish. They had the groundwork. And most of the problems *i* had were that this was in the early days of apple's MRJ runtime and the MRJ was *slow*.

    So then what did they do? Well, um, nothing. After awhile they decided it wasn't worth the bother and just stopped updating, maintaining or allowing you to download it. By the time the MRJ reached a decent level of speed, which was still the EARLY days of java, you couldn't get Wordperfect for Java anymore, and if i remember right the older WPJ versions had some big incompaibilities with the later MRJ versions anyway. Had they kept developing it, they probably would have been able to come up with a reason why Wordperfect for Java is a good idea, and it would have been a usable, considerable project. Java's a big thing now, Java's everywhere, Java could probably use a wordprocessor. But they didn't bother to let that happen.

    And then the linux thing. Everyone said it was a neat distro, not *very* revolutionary, but that it needed more work. Did they do the work? Did they develop the product until it lived up to its stated goals? Did they even maintain it long enough for it to take hold? No, they just went "hm, this isn't taking over the world overnight, it probably isn't worth the bother". Then they ran out of money.

    I don't know what's up with this .NET or XML things, but i'm willing to bet that Corel won't really bother coming up with a reason why you should be excited or whatever that they're using .NET and XML now, and they won't explore or exploit the possible benefits of .NET and XML being part of their architecture, whatever those are.

    This is, of course, just my perception of things, and i could be wrong, but *shrugs*.
  • by drinkypoo ( 153816 ) <drink@hyperlogos.org> on Tuesday March 11, 2003 @07:02PM (#5488692) Homepage Journal
    If you killed linux, something else would rear its head and take its place, hopefully something with a more "modern" architecture. (The only reason *I* want a microkernel architecture to be standard is the ability to run multiple "operating systems" (maybe should be called operating environments at this point?) at the same time.
  • Comment removed (Score:3, Insightful)

    by account_deleted ( 4530225 ) on Tuesday March 11, 2003 @07:08PM (#5488755)
    Comment removed based on user account deletion
  • by pyite69 ( 463042 ) on Tuesday March 11, 2003 @07:21PM (#5488917)

    Corel's Linux products, before the Microsoft investment were great. I'm
    talking about Wordperfect 7 and 8. Their Wine project had potential,
    but version 1 sucked. Unfortunately they didn't stick it out and release
    a 1.1 version - which would likely have ruled - due to Microsoft's
    influence.

  • by oogoliegoogolie ( 635356 ) on Tuesday March 11, 2003 @07:31PM (#5489013)
    Jezuz, I forgot all about their little stunt in trying to rewrite WP in java. My god what were they thinking?

    Finally a definitive account of the Corel's shoddy history instead of the kneejerk "It's all Microsofts fault" reaction. Michael Cowpland is the reason Corel is where they are today. He was noting but a blowhard. Corel developed one good product (Draw) and everything else they acquired from other companies, usually knee-jerk reactions to jump on the latest bandwagon at the time . Remember "thin-clients?" Remember "Corel-Linux?"

    Combine that with the fact that Corel couldn't market water in the middle of the desert and it's obvious that MS isn't the main reason why they are going down the drain.

  • by NineNine ( 235196 ) on Tuesday March 11, 2003 @07:37PM (#5489054)
    Corel Did. MS did NOT own a majority share in Corel, thus they couldn't do anything in the company without support. Corel's horrible management killed Corel. They should have just stuck with what they were good at. Instead, they jumped on (and are continuing to jump on) ev ery trendy bandwagon that rolls through the industry. Corel is irrelevant. Too bad WP is gone. I use Textpad now, but it would've been nice to have something with a few more features.
  • by fernd1 ( 582087 ) on Tuesday March 11, 2003 @07:42PM (#5489108)
    According to this post Microsoft Bails Out Of Corel [slashdot.org], Microsoft converted their shares for sale back on Feb 22, 2001. All this means is they found a buyer. Also, for all of those that say Corel is dead, I haven't seen anything about them declaring bankruptcy. In fact, they are refocusing their efforts on what they do best, graphics. Their graphics programs have always been simple to use, and output quality images. With their new CEO, and refocused strategy, they may have a chance to recover from their Linux debacle.
  • by Unregistered ( 584479 ) on Tuesday March 11, 2003 @07:46PM (#5489150)
    I can guarantee that Joe Schmoe wont mind trying linux out if MS backs it

    Which is why MS wouldn't back it. They like selling windows. It makes them money. They don't want people moving to another platform.
  • Citizen Bill (Score:3, Insightful)

    by runlvl0 ( 198575 ) on Tuesday March 11, 2003 @08:15PM (#5489387) Homepage Journal
    from Citizen Kane:
    Charles Foster Kane: You're right, I did lose a million dollars last year. I expect to lose a million dollars this year. I expect to lose a million dollars *next* year. You know, Mr. Thatcher, at the rate of a million dollars a year, I'll have to close this place... in 60 years.

    I'm not really sure what I mean by posting this, but it seems appropriate somehow.
  • by Alethes ( 533985 ) on Tuesday March 11, 2003 @08:25PM (#5489499)
    Microsoft has as much of monopoly as the consumers and vendors let them. If you don't like them having so much control, then stop buying their product or supporting vendors that buy their product. That includes copying your friend's Office XP CD that he got from work.

    I'm sure this will be moderated as flamebait, but the fact remains that the consumers made their choice whether they like it now or not, and there is no reason Microsoft should be punished because their marketing works too well. This is something every one of Microsoft's competitors, including Corel, needs to learn. The quality of the product means nothing if you can't market it properly. Microsoft's products are on many levels inferior to those of their competitor's, but their marketing is second to none and they will pretty much call the shots until the rest of the software industry learns how to play the game.

    If the consumer doesn't like IE being bundled with Windows, let them prove it by buying and using other software. If competitors want to gain a larger marketshare, let them innovate instead of whining. It's not like they're competing against quality software.
  • Re:90% Loss? (Score:3, Insightful)

    by Nessak ( 9218 ) on Tuesday March 11, 2003 @08:28PM (#5489523) Homepage
    OK, where is the proof. Every time there is a story on Microsoft/Xbox someone has to come out and say "They lose money on everything but windows/office." I don't buy that for a second. MS is huge company with lots of cash. It can afford to lose on some ventures (Xbox) but they make a hell of a lot of money on many other things. Server apps, business aps, other homes apps. MS makes a lot.

    Before pushing the standard MS lines, try to provide some proof, as I have never read (becides from slashdot) that MS loses money on everything but Win/Office. I don't love MS, but I hate posts pushing "facts" which make little logical sence when there is little proof to back them up. Just becuase we may not like MS dosen't mean they don't have a lot of products making a lot of cash.
  • not quite (Score:5, Insightful)

    by RelliK ( 4466 ) on Tuesday March 11, 2003 @08:28PM (#5489531)
    What Corel did, and I really find this unforgivable, was they got the brainiac idea to "sync" the two versions of the code base (X and window) by using wine!

    No, what Corel did, back in 95 or so was simply drop WP on all platforms but Windows and started to compete with Microsoft head to head on Microsoft's own platform. We all know how well that turned out. When Linux became a buzzword and Corel was looking for a new bandwagon to jump on, they simply couldn't produce a native version of WP in a reasonable timeframe, so they just hacked it until it ran under WINE without crashing too much. When I downloaded a trial version of WP8 for Linux, my first reaction was "are they actually trying to sell this thing?". I had the same impression about their distribution: a good start, but far, far from a finished product.

    Had they kept the Unix ports going, they would have been able to provide a high-quality office suite for Linux. The last version of WP I used was WP8 (for Windows), and I certainly would have paid for a Linux version. But no, I am not interested in half-assed wine hacks.

    Anyway, the story of Corel is truly sad. They were an awesome graphics company back in early 90s, but they kept making one boneheaded decision after another. This is a perfect example of how *not* to run a company.

  • by Kwil ( 53679 ) on Tuesday March 11, 2003 @09:53PM (#5490142)
    I take it you didn't actually purchase a computer between 1995 and 2000.

    Had you done so, you would have found that your choices for purchasing a computer without Windows were extremely limited. And this was no doubt in large part to the anti-competitive OEM agreements that Microsoft foisted upon any company that wanted to sell Windows at all.

    But hey, you knew this already and were just trying to troll me, I realize..

    Hence the sig...
  • Re:Well, duh (Score:3, Insightful)

    by kelzer ( 83087 ) on Tuesday March 11, 2003 @10:11PM (#5490279) Homepage
    No, investing in Corel was just another effort to keep the "competition" alive until the whole anti-trust thing was over. Same reason MS invested in Apple and Borland.

  • by drinkypoo ( 153816 ) <drink@hyperlogos.org> on Tuesday March 11, 2003 @11:51PM (#5490912) Homepage Journal
    People keep saying that but so far no one has raised an even remotely plausible scenario for this happening.

    Consider what would happen even if Microsoft did make Palladium (or some similar technology) mandatory on all of its software, and furthermore windows would only run on hardware designed for so-called trusted computing (Remember the scare a year or two ago, whenever the hell it was, about DRM-enabled hard drives?) so that copyrighted digital media, once loaded onto your computer, was more or less inviolate.

    The answer: More and more people would be fed up with the layers of crap and they would be ripe for a new solution. An entirely new player would then have a good shot at entering the market.

    Of course, even if we DO get to that point and the public DOESN'T rebel, we will still have several avenues of approach available to us. First, there are various other CPU designs which we can use which are unlikely to be forced-DRM any time soon. China's Longxin processor (or whatever it's called this week) is a prime example. China will control people through legislation and fear and not through computer hardware because they know that if you have more than a billion people running around your country, someone is going to figure out how to defeat your protection. So their CPU and its eventual descendants may provide us a way out of hell.

    But again I really don't think we will ever get near that stage. Also Microsoft plain and simply will not exert a reign of control over the internet for a variety of good reasons. First, none of it really belongs to them now. Second, companies which are as large and maybe as powerful as Microsoft who are currently in control of the internet, or at least large portions of the infrastructure, have too much to lose by letting them get ahold of it. And finally, if Microsoft did end up "owning" the internet, another internet would rise up. By that hypothetical time it should be even easier and cheaper to do something like that because as technology marches on it makes things cheaper.

    So... Stop spreading FUD, you reactionist weenie. There is no danger whatsoever that microsoft will take over the world.

  • by IamTheRealMike ( 537420 ) on Wednesday March 12, 2003 @05:43AM (#5492287)
    Take that $250,000 and offer it to the developers if they will sign a contract to stop working on anything non-Microsoft. Those that refuse this offer will get a $250,000 bounty put on their heads. Either way, taking out the top 40,000 Linux developers will certainly put a fatal dent in the Linux roadmap.

    Sure, until the next generation, eager to code cool stuff and maybe get a huge payoff to stop, replace them.

    Oh and BTW, what do you mean by a bounty?

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