Copy, Acquire, Kill (Premium)

This week, the CEOs of Amazon, Apple, Facebook, and Google will have their “Big Tobacco moment” when they all appear before a congressional antitrust committee and try to defend what are clearly illegal business practices. This hearing is fascinating on a number of levels, and I can’t wait to see the evidence that investigators have amassed against these too-powerful firms. But as someone well-versed in Microsoft history, there’s one element of this evidence that I’m particularly interested in.

It's called “copy, acquire, kill.”

The Washington Post reported this week that representative Pramila Jayapal, one of the congressional committee panel members who will square off against the most powerful men on earth this week, has already publicly discussed evidentiary documents that describe how these companies use this “copy, acquire, kill” strategy to eliminate their competition. “[the committee has seen some] very specific language from top-level executives about that,” she said.

This phrase is, of course, reminiscent of Microsoft’s strategy to “embrace and extend” the emerging Internet technologies of the mid-1990s to destroy Netscape and continue the dominance of Windows. But is it also a phrase we could apply to today’s Microsoft?

This is a fair question.

As I’m sure you saw, Slack last week complained about Microsoft’s business practices to EU antitrust regulators, thrusting the software giant uncomfortably back under a spotlight it has avoided for over 15 years. The story to date has been that Microsoft is no longer the dominant bully running roughshod over the industry, and that the companies that regulators are now concerned with---Amazon, Apple, Facebook, and Google---have collectively emerged to take its place.

But Microsoft is bigger than most of those companies. Indeed, it consistently vies with Apple for the title of being the biggest company in technology by market cap. As I write this, Microsoft’s market cap of $1.54 trillion is second only to Apple’s, which sits at $1.64 trillion.

Microsoft’s real advantage over the Apples of the world isn’t its size, it’s that its business is so diversified. The software giant has three main business units, and each typically generates nearly identical revenues each quarter (so much so that even the revenue skewing caused by COVID-19 in the most recent quarter was slight). That allows it to weather bad times for individual businesses, of course. But it also shields the company from antitrust complaints: Microsoft is huge, but unlike Amazon, Apple, Facebook, and Google, it doesn’t dominate any single market to the degree it did when Windows and Office literally defined personal computing.

But it’s hard to see the phrase “copy, acquire, kill” and not think of the Slack complaint. Does it have any merit?

On the face of things, of course it does.

Faced with a new competitor that threatened its office productivity off...

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