Mar 222011

Poor MG Siegler. He’s a writer for TechCrunch, which is pretty bad in itself. Two words: Mike Arrington. When your site’s founder isn’t hyping a tablet project that ended up getting yoinked by his partner, only to have it launch DOA, its filling its RSS feed with doth-protest-too-much entries about maintaining its journalistic integrity after selling out to AOL. So, you may ask, what’s worse than writing for TechCrunch? Writing the de facto Apple beat and liking the company you’re writing about. Perusing the comment sections of one of his articles is like watching a predator-prey scenario unfold on the Serengeti, except in this case the hyenas are retarded.

Case in point: Siegler pointing out that Microsoft’s suing of Barnes and Noble for its use of “intellectual property” outlined in patents going as far back as 1994 is the latest example of the company’s transformation from “business that makes stuff poorly” to “business that buys companies that make stuff well, smashes them with a hammer and uses their IP to bully other companies that do things well into paying licensing fees”. That sounded a lot shorter when I said it.

If you’re unfortunate enough to scroll down to the comments in the article, the first cry of “FANBOYYYYYYY!” is timestamped at 4 nanoseconds after the post uploaded. I think the first 67 comments referred to Apple’s recent lawsuit against Amazon for its use of the term “Appstore” as if that provided some kind of immunity from criticism for Microsoft. As far as TMA is concerned, Siegler deserves a special place in the afterlife reserved for those who speak truth to dumb. For that, I thank him.

Apple’s history of legal action isn’t entirely devoid of ulterior motives, nor does it have a flawless win-loss record, but the Apple-Amazon and Microsoft-B & N actions are nothing alike. First and most obviously: Apple is suing Amazon over the App Store trademark, or name. Microsoft is suing B&N over “UI elements”, specifically those associated with browsing and downloading information. Feel free to browse them in all of their overarching glory. Most of them harken back so far as to reference Windows 3.1, when I doubt the PTO knew what they were even putting patents on. There’s also a good bit of irony in Microsoft having the stones to reference a UI it stole outright, but I digress. By today patent standards, lousy as they are, to say the stuff they cover is “overly broad” is an understatement.

Secondly, the intent of Microsoft’s patent defense is not to keep people from muscling in on whatever it is they claim they own; its designed solely to feed its stagnant business model. Apple, on the other hand, is looking to shut down the action perceived as infringing, which in a lot of people’s books is what a patent or trademark defense was designed to do. Redmond doesn’t want Barnes and Noble to stop doing what they’re doing. They want B&N to pay off their IP on a per-unit basis. As Siegler points out, Microsoft has licensing in its DNA – that’s what Windows is. Combining licensing and jerking around this country’s joke of a patent system can be a pretty decent business model. Just ask Nathan Myhrvold and Paul Allen – two of the Valley’s more comical patent trolls – who also happen to be (shockingly) former Microsoft executives.

Apple, on the other hand, has no intention of licensing the term “App Store” any more than it intends to license the “look and feel” of iOS. The bad news for B&N is that companies like HTC and Amazon have already bought into Microsoft’s bullshit and have such a relationship with Redmond, which makes for a nasty precedent. The bad news for Microsoft is that B&N’s business model might not survive long enough to payoff their ambulance chasing. You’d think Google, which has not been a party named in any lawsuit by Microsoft to date, would be looking to defend the Android OS, a version of which B&N’s Nook runs. However, Google’s less-than-scathing “Sweeping software patent claims like Microsoft’s threaten innovation.” quote suggests Google is more interested in continuing to steal any IP that isn’t nailed down – and some that is – over defending the weak kid from the Silicon Valley bully.

If you don’t think – in addition to the skill of being able to destroy value first-hand – Microsoft isn’t muscling in to be the biggest toll-taker on the IP highway, take a look through their financials. The asset of goodwill, besides representing the value of Microsoft’s brand, carries all the carcasses Microsoft has leached after acquiring (and destroying) other companies. It’s 15% of the company’s balance sheet. Apple, by contrast, is one-tenth as much. Since 2005, Microsoft’s goodwill “asset” has tripled – due in no small part to the acquisition of over 50 companies – while their stock price hasn’t moved. Much like the gaping hole drilled into Adobe’s books by the acquisition of Macromedia fueling their constant push of Flash, Redmond must justify its goodwill growth somehow.

Apple is a company firing on all cylinders, making wildly popular hardware and software that people scoop up and adore at ridiculous margins. Microsoft is a company reduced to shilling redundant versions of Windows and Office to its shrinking army of corporate IT drones, an exercise that is producing less and less of a yield for them. Microsoft is basically burned through any consumer confidence it may have had after spending billions over the last 5 years acquiring the assets to make consumer electronics only to have them faceplant in the market. It’s only natural that Microsoft resort to getting value from these husks via the IP viscera their in-house counsel can use to strangle the innovation of other companies.

MG Siegler has it right. To all the clucking “DURRRR APPLE DOES THIS TOO, FANBOY” masses, TMA has a one-finger salute for you.

Leave a Reply

  • RSS
  • Twitter
%d bloggers like this: