Comments on: Google To Buy Sun? A Merger Rationale http://www.psynixis.com/blog/2006/03/18/google-to-buy-sun-a-merger-rationale/ Simon Brocklehurst's Technology Blog Sun, 12 Oct 2008 05:11:46 +0000 http://wordpress.org/?v=2.6.2 By: simon http://www.psynixis.com/blog/2006/03/18/google-to-buy-sun-a-merger-rationale/#comment-1177 simon Mon, 24 Apr 2006 09:37:29 +0000 http://www.psynixis.com/blog/?p=134#comment-1177 Sticking to your core business is a good idea, only if your core business is a solid one with a great future, and you don't see greater opportunity elsewhere. M&A is an attractive route to achieving success in new business areas - for example, before Nokia became such a powerhouse in mobile communications, they used to make rubberised footwear. They realised that the future of telecomms looked brighter than the future of rubber boots. Also, if you want to add value, it's often better to buy companies that *appear* to be dead or at least very ill, because they will be much cheaper. Iif there's no value to be added, you're simply playing a zero-sum game. Of course, it goes without saying that you have to know how to add the value, and your acquisition must have the potential to be a successful business. Sticking to your core business is a good idea, only if your core business is a solid one with a great future, and you don’t see greater opportunity elsewhere. M&A is an attractive route to achieving success in new business areas - for example, before Nokia became such a powerhouse in mobile communications, they used to make rubberised footwear. They realised that the future of telecomms looked brighter than the future of rubber boots.

Also, if you want to add value, it’s often better to buy companies that *appear* to be dead or at least very ill, because they will be much cheaper. Iif there’s no value to be added, you’re simply playing a zero-sum game. Of course, it goes without saying that you have to know how to add the value, and your acquisition must have the potential to be a successful business.

]]> By: Will Warner http://www.psynixis.com/blog/2006/03/18/google-to-buy-sun-a-merger-rationale/#comment-1154 Will Warner Sun, 23 Apr 2006 10:54:59 +0000 http://www.psynixis.com/blog/?p=134#comment-1154 As a Google CEO with a desk full of overvalued paper, you /could/ buy big companies; or you could just stick to your core business, make sure not to overextend yourself, and wait for the paper's value to fall. Especially if the big companies for sale are like Sun. Sun makes hardware with good design, but they're getting eaten by the badly designed Intel/AMD x86 architecture, which is back compatible and is an emerging universal standard, driven by economies of scale. Sun's tried hard to become a services company, but until they kill their doomed hardware business, they're a bad buy. Linux is already eating Solaris, in another case of economies of scale promoting standardization on an inferior product. (Although Linux is copyleft, which means that no one will ever have to pay for it, and that it runs on practically all architectures, so maybe it's not inferior.) There are copyleft implementations of both Java and OpenOffice, so Sun will never be able to charge for them. The existence of Java and OO already gives Google leverage against Microsoft, but owning and funding the Java and OpenOffice teams themselves, and owning the copyrights on the reference implementations, wouldn't give them any more. Buying Apple is a cute idea, but aside from being hip and having something or other to do with computers, the companies have nothing in common. In fact, the same applies to Sun. Google might just as well buy Dairy Queen. As a Google CEO with a desk full of overvalued paper, you /could/ buy big companies; or you could just stick to your core business, make sure not to overextend yourself, and wait for the paper’s value to fall. Especially if the big companies for sale are like Sun. Sun makes hardware with good design, but they’re getting eaten by the badly designed Intel/AMD x86 architecture, which is back compatible and is an emerging universal standard, driven by economies of scale. Sun’s tried hard to become a services company, but until they kill their doomed hardware business, they’re a bad buy. Linux is already eating Solaris, in another case of economies of scale promoting standardization on an inferior product. (Although Linux is copyleft, which means that no one will ever have to pay for it, and that it runs on practically all architectures, so maybe it’s not inferior.) There are copyleft implementations of both Java and OpenOffice, so Sun will never be able to charge for them. The existence of Java and OO already gives Google leverage against Microsoft, but owning and funding the Java and OpenOffice teams themselves, and owning the copyrights on the reference implementations, wouldn’t give them any more. Buying Apple is a cute idea, but aside from being hip and having something or other to do with computers, the companies have nothing in common. In fact, the same applies to Sun. Google might just as well buy Dairy Queen.

]]> By: michael devenney http://www.psynixis.com/blog/2006/03/18/google-to-buy-sun-a-merger-rationale/#comment-1136 michael devenney Fri, 21 Apr 2006 13:11:31 +0000 http://www.psynixis.com/blog/?p=134#comment-1136 I believe the timeing for such an acquisition would be in the summer or fall of this year. I can see where there would be significant efficiencies to be had especially with the STK addition. Good sailing! I believe the timeing for such an acquisition would be in the summer or fall of this year. I can see where there would be significant efficiencies to be had especially with the STK addition. Good sailing!

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