Odds and ends
Some notes and follow-ups on recent deals or non-deals.
1. Blockbuster finally gave up on its crazy idea to buy Circuit City - which we laughed at here.
2. Discover Financial Services, owner of the Discover card, completed its purchase of Diners Card International from Citigroup. The deal was for $195. It's a funny little move. Neither Discover nor Diners look likely to get nay traction, especially with the credit card business catching the flue from the subprime mortgage crisis. Discover stock is selling at 50% of its year high.
3. Microsoft is still trying to buy Yahoo, but in the meantime, it has bought Powerset, a search engine company. The deal was for $100 million. Powerset specializes in semantic searches, which involve analyzing so-called "natural language" search requests, such as "What is the best gas mileage for an SUV?", then returning URLs that might address the problem.
As Tom Foremski, a Ziff-Davis online columnist, notes ("MSFT's acquisition of Powerset is not about search", 7/4/08 notes, the reason for the deal is not for making the user search experience better so much as it is for improved advertising, so-called "context-sensitive" advertising. Right now, as he points out, Google is far ahead of both Yahoo and Microsoft, in delivering context-sensitive results. In fact, Yahoo now contracts out to Google for that very reason, a good motivation for Microsoft to develop a rival system.
4. IBM just acquired a threatening new innovator in the mainframe computing world. It bought Platform Solutions Inc., a small mainframe software developer that had sued IBM over anti-competitive actions. The company had made it possible to run IBM's z/OS operating system on Intel chips on far less expensive hardware.
After some suits and countersuits, IBM stepped in for an undisclosed sum (rumored to be in the hundreds of millions), reestablishing it virtual monopoly on the mainframe business. What this means is that IBM, according to Jeff Gould writing for Interops Systems ("IBM vs PSI; Goliath slays David" "cementing a monopoly that is now more complete than at any time since Amdahl launched the first plug-compatible mainframe in 1975."
This sounds like a case for antitrust measures, But as Gould notes, the buyout may be too small to get the regulators worked up:"IBM is saying that since they already own 99.9% of the market, squashing the one remaining competitor who has 0.1% is no big deal."
(thanks to reader Chris Brainard for the tip)
