• Jeff Matthews

$35 Billion In Cash But No Tech Support

Microsoft is stuck in a rut.

Don’t get me wrong: it is an extremely profitable rut. But it is a rut all the same.

Right now, for example, I am typing the draft of this blog on a Microsoft Word program that came with the Microsoft Operating System that came with my Sony notebook.

The only reason I use Word is that Microsoft has a monopoly on operating systems, and you can’t buy a regular old personal computer that doesn’t come with Microsoft software, which is too bad, because Microsoft software is terrible.

By that I don’t mean it doesn’t work, it’s just that because Microsoft has a monopoly and sells Microsoft Word to everyone who uses a computer, Word is crammed with every single thing everyone who uses a computer might need, like “Palatino Linotype” fonts.

Which makes Word less like something a really creative software company invented, and more like something the old Phone Company would have come up with.

For example, there are more than 30 little buttons in the “Tool Bar” at the top of this version of Word, each with a symbol so that writers can merely click a button to accomplish a task. “Tool Bars” are cool, helpful devices that took some of the mystery out of using word processing programs, and I am pretty sure Microsoft did not invent them.

Microsoft was not ever in the business of inventing cool, helpful things. Microsoft saw other companies come out with cool, helpful things—like spreadsheets and word processors and calculators and databases and the “graphical user interface” itself—and copied them like Chinese companies copy American technology without ever paying for it and sell it for an impossibly low price.

When you have a monopoly—whether it’s a country or a software developer—you can do that sort of thing.

In any event, some of the symbols on my Microsoft Word “Tool Bar” are easy to grasp, like the little icon of the floppy disk, which is clearly the “save” button.

Others are not so easy to grasp, such as the little greenish circle that looks sort of like the earth, only it has a chain beneath it. I am thinking this is the symbol of Microsoft owning the world monopoly on desktop computer software—millions of shlubs all around the world, chained to software that offers Palatino Linotype fonts and eighteen-zillion different ways to format text….but if you accidentally hit the ‘insert’ button you will type over things you’ve already written.

The most ridiculous part of the ‘insert’ button is that the only time I type over things I’ve already written is when I’ve accidentally hit the ‘insert’ button.

If Microsoft had the monopoly on car engines, I suspect there would be a dashboard button with some fancy symbol on it, which, if you pressed it by mistake, would instantly stop and restart your car engine, even if you were doing 80 miles an hour on Interstate 95.

And the only time you would ever know you had a function like that for your car is when you accidentally pressed the ‘restart engine’ button, right in the middle of Interstate 95.

But I digress.

After I finish writing this in Word, I will then copy it onto my Blogger Dashboard, which is Google’s blogging service. Google provides the blogging service for free.

Unlike Microsoft software, Google’s blogger is actually as simple to use as it says it is. And furthermore, unlike Microsoft software, when you have a problem with the Google blogger and you send an email to the Google Blogger Help Desk, somebody actually responds.

I had a problem with the Microsoft Network email last year. It was not the first time I ever had a problem with it, but it was an unusually bad problem: nobody was getting my emails. When the problem went away after a day or two, I emailed the unhelpful Microsoft Help Desk, and received an email saying they couldn’t help me two months later.

I am not making that up.

So here we have two companies whose products I use every day:

1. Microsoft, whose motto could be “$35 Billion In Cash But No Tech Support,” which makes overengineered NASA-type products, and charges monopoly pricing to people who have no other choice.

2. Google, which gives away searches, maps, blogging tools, satellite images…and offers tech support to boot.

Which is a better business?

Before you answer, consider this: Microsoft only gets paid once when somebody buys a computer. It’s a lot of money, and it’s at obscene profit margins—monopolies being what they are. But it’s still only once in the life of that computer.

Google, on the other hand, has a chance to get paid every second of every minute of every day by somebody somewhere using the Internet who clicks on an ad Google has placed on one of those searches or maps or satellite images or blogs you have used. It’s a tiny piece of change, not being monopolistically priced operating system software. But the pennies add up. (Last week’s earnings report showed just how quickly those pennies are adding up for Google.)

And I will bet money that right now every half-smart Microsoft employee is thinking “Who needs this Fixing-Longhorn-Bug-Number-19,852 nonsense when I could be creating something really cool—like Google Maps…for a company with a future instead of a past?”

And since Gates can never duplicate Google and roll out a copy at a lower cost to the user like he did all those tool bars and spread sheets and GUIs—because Google is free—he can’t stop it.

Because Google is the future.

And Microsoft is the past.

Jeff Matthews I Am Not Making This Up

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The content contained in this blog represents only the opinions of Mr. Matthews. This commentary in no way constitutes investment advice. It should never be relied on in making an investment decision, ever. The content herein is intended solely for the entertainment of the reader, and the author.

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