Chapter 39 Section 6 Battle of Teutoburg

I often compare Apple to Greece and Microsoft to Rome.As we all know, Greece is the cradle of European civilization, gestating prosperous culture, science and art.Apple is the pioneer of microcomputers and the birthplace of microcomputer industrial culture.Rome learned a lot from Greece and then beat its teacher, it built a mighty empire and a beautiful city, but it didn't innovate much.Microsoft is a lot like Rome, it learned a lot from Apple and beat Apple.The rise of the Roman Empire and the formation of the Microsoft Empire were exactly two thousand years apart.Another striking similarity between Microsoft and the Roman Empire is that their expansion ends with their creators.

Let us go back to two thousand years ago through the space-time tunnel.In AD 9, the founder of the Roman Empire, Augustus the Great, had ruled Rome for more than forty years.The Roman Empire has a vast territory, the country is prosperous and prosperous, singing and dancing are peaceful, and foreign nations come to court.The territory of the Mediterranean Sea that the Roman Empire has already occupied, if it wants to expand, it will go north to seize the territory of the Germans.The Germans at that time were nothing but a backward barbarian.In this year, the Germans began to attack, and the Roman Empire sent a large army, but they were completely annihilated by the Germans in the Teutonburg forest. At this point, the expansion of the Roman Empire ended, and the Roman Empire continued to win wars, but its territory of no more than the age of Augustus.After the Battle of the Teutoburg Forest, although the whole country of Rome demanded revenge, the old Augustus no longer had the ambition to defeat Antony (Cleopatra's lover), so he endured it.What's more terrible is that a few years later, when Augustus conscripted troops in Rome, none of the original brave Romans recruited.

Now let's get back to reality.The entire 1990s can be said to be the decade of Microsoft. During this decade, countless companies, large and small, in the entire Silicon Valley were beaten by Microsoft.Gates is even galloping in the market, with few rivals.However, in order to ensure the company's sustainable development, after monopolizing the entire microcomputer software industry, Microsoft must also find new growth points, otherwise Wall Street will not pursue its stock.It is clear that the next gold mine in the world is the Internet.When Microsoft beat Netscape, Jerry Yang and David Filo had built Yahoo into the world's most popular website.By the end of the 1990s, Gates freed up his hands and established MSN to enter the Internet market on a large scale.

Compared with the mighty Microsoft, Yahoo is very much like the little barbarian Germanic.But it was the young Yahoo who successfully blocked Microsoft and kept the latter away from the Internet field.The rise and fall of Yahoo will be specifically mentioned in the future. Now, let us see that Yahoo is successfully blocking Microsoft's expansion. When Yahoo was fighting with Microsoft and Netscape, it seized the opportunity of the portal website and was the first to provide everyone with free email service.Microsoft's way of beating the likes of Netscape and Real Network was to give away competing products for free.But this trick doesn't work for Yahoo, because Yahoo's service itself is free.Companies such as Netscape and Real Network that produce client software for microcomputers cannot survive without receiving money for the software, and Yahoo has found a new business model, which is to let content providers pay (in the early days, the news was put on Yahoo The Internet is to pay Yahoo) and do brand advertising for large companies.In the advertising industry, pay attention to the right match, that is, brand-name things must be advertised on the best media.As the earliest and most influential portal website, Yahoo is undoubtedly the place where big companies are most willing to advertise.With advertising revenue, Yahoo continues to launch many free services, in addition to e-mail, there are also job search, stock viewing, weather forecast, air ticket buying and so on.Under the leadership of Yahoo, relying on the support of venture capital companies and the pursuit of Wall Street, all Internet companies adopt Yahoo's free model.Microsoft's thinking is still stuck in the era of microcomputers, and at first it tried to collect a network fee from each family.As a result, the number of MSN users fell far behind Yahoo.In order to compete with Yahoo, MSN sold Hotmail and tried to buy some users directly. However, Microsoft made a mistake. It spent a lot of energy changing Hotmail's server and original Unix to Windows NT, which is not suitable for managing millions of users. Later, I had to change back to Unix, which wasted time.Generally speaking, Microsoft's brains are still stuck in the microcomputer era of selling software one by one, and it is following the same pace in developing network services.This once again confirms that Microsoft's genes determine that it is not easy to adapt to the Internet age.

In terms of personnel, many employees of Microsoft, especially the old employees, have enjoyed the country for a long time, and their motivation is not as good as before, just like the citizens of Rome in the later period of Augustus the Great.At Microsoft headquarters in Redmond, the parking lot is empty after 6 p.m.At Yahoo, almost everyone works all night.Wall Street helped Yahoo a lot in the battle between Yahoo and Microsoft.Since Yahoo's various services are free, the income is not high, and the profit is pitiful.However, Wall Street believed that Yahoo represented the future, and sought after Yahoo's stock very high. At one time, the price-to-earnings ratio reached 1000/1, which means that its stock price was a thousand times the earnings per share.At that time, the company's additional options were not included in the cost.Therefore, Yahoo continues to issue additional options to employees, but only needs to pay employees very little cash wages.Under the hype of Wall Street, the stock options in the hands of employees rose at a rocket speed.The vast majority of people who joined Yahoo before the dot-com bust were millionaires on paper in 2000.Therefore, the morale of Yahoo people is extremely high.It can be said that without the help of Wall Street, the little Yahoo cannot withstand the attack of Microsoft MSN.

When the Internet bubble collapsed and Yahoo's marketing and stock plummeted, it was naturally powerless to stop Microsoft, but it had completed its historical mission.And Microsoft has not expanded temporarily because of the economic downturn in the United States.Looking back now, Microsoft just missed the best time to enter the Internet at that time.At that time, no company could compare with Microsoft financially.Sitting on tens of billions of dollars in cash and generating billions of dollars in profits each quarter, Microsoft is well positioned to build an online empire.On the other hand, many companies began to lay off employees of the whole department. It was a good opportunity to acquire talents and technology, but Microsoft did not move.There are many reasons for this, but four are the main ones.First of all, Microsoft is no longer the corporal company that it used to be. It has become very arrogant to talents and technology, and Microsoft has begun to lose talents.Second, after all, because of the antitrust lawsuit, it is somewhat restricted in company acquisitions, so that it was preempted by Yahoo in the acquisition of search company Inktomi and online advertising company Overture.Third, for a long time, Ballmer has cooperated very well with Wall Street. In order to cater to Wall Street, Microsoft always makes its financial reports beautiful. Therefore, it is unwilling to invest a lot of long-term new technology projects, which will make profits and cash flow decline.In this regard, Buffett is much smarter and farsighted than many company bosses.He never cared what Wall Street said, as long as he saw something right, he would seize the day to do it.Although sometimes the performance of his company Berkshire Hathaway will be greatly affected in a short period of time, in the long run, the performance of Berkshire Hathaway is unmatched by other companies.Fourth, after the Internet bubble, no one is sure whether the Internet can make money, and Microsoft is no exception.According to people close to Gates, even before Google went public, Gates believed that open source Linux was Microsoft's main opponent, and he didn't think Google could become a big success.His subordinates asked him what he thought of Google, and he felt that one or two departments could handle Google.

I like Hegel's words very much: everything that is realistic is reasonable, and everything that is reasonable is realistic. (All that is real is rational; and all that is rational is real.) Although this sentence is often misunderstood as an excuse for today's irrational reality, in fact, if we look at reality and rationality dynamically, we can take this sentence It is understood that the phenomenon that exists now must have its reasons and reasons when it was produced in the first place.If this reason does not exist in the future, it will die one day after all.Microsoft ruled the roost in the microcomputer era, and it has its own rationality.However, in the Internet age, the display has changed, and the rationale for Microsoft to rule the roost again is gone.