What’s Old is New Again (Premium)

As a long-time Microsoft follower, it’s fascinating watching the software giant return to its anticompetitive roots. Indeed, it’s almost a welcome relief after several saccharine years of the feel-good Satya Nadella era.

Almost. Naturally, the company’s competitors are not greeting this reversion with anything close to joy. Instead, these victims can only hope and pray that antitrust regulators---who are far too busy right now trying to do something meaningful to curb the market power of Amazon, Apple, Google, and Meta---care in the slightest. They’ve only gotten a few nibbles, and both of those---Slack’s complaint against Microsoft Teams and Sony’s endless bitching about the Activision Blizzard acquisition---are both so specious that they’re almost guaranteed to fail.

So let’s start there.

In 2016, Microsoft saw that a tiny upstart called Slack was making more inroads with its traditional enterprise customer base than had any other competitor before it, including Google. The problem was clear: Microsoft needed to solve the Slack problem. And so it proceeded as would any entrenched and dominant monopolist: it offered to buy the company.

But Microsoft co-founder Bill Gates---who, then as now, was far more involved in decision-making than the firm’s executive staff would like the world to believe---was apoplectic. He argued that Microsoft already had everything it needed to defeat Slack, and that there was no reason to buy a company whose technologies it would simply bury in lieu of its own. And so Microsoft instead created Teams, which started life as a Slack clone, of sorts---it was originally a chat-based collaboration client---but with a Microsoft look and feel. And then Microsoft improved Teams frequently and rapidly, adding and adding features and gaining and gaining users. Within just four or five years, Teams had 10 times as many users as Slack.

If this story seems familiar, it’s because this is exactly what Microsoft did previously to Netscape in the late 1990s: after failing to acquire the firm, it set out to destroy it. (The only minor difference being that Microsoft had to license some browser technology from Spyglass to jumpstart that effort.) And the story even ends the same way: right after it complained to antitrust regulators that big, bad Microsoft was killing it, Slack found a well-healed benefactor in Salesforce, which purchased it for $27.7 billion, just as AOL had purchased Netscape for $4.2 billion in 1998. In both cases, Microsoft’s alleged abuses were undercut by the business reality that those failed companies were, in fact, still worth billions and were thus not hurting as much as they had complained. Oops.

I’ve already covered Activision Blizzard many times, but my central opinion---that there are no grounds whatsoever for any regulatory body to block Microsoft’s acquisition---hasn’t changed an iota. More to the point, it is now increasingly obvious that this acquisiti...