EU hands Microsoft a record fine of $1.3 billion



SEATTLE — Microsoft on Wednesday bore the brunt of Europe's desire to send out a message that it expects big corporations to respond to antitrust sanctions in a timely, contrite manner.

The European Commission fined Microsoft a record $1.3 billion, adding to a $357 million fine handed down in July 2006.

Both fines stem from Microsoft's slow compliance with sanctions in an antitrust case that originated in 2004. Microsoft for years had used delaying tactics and vigorously pursued appeals. But last fall the software giant reversed strategies, saying it wanted to put the case to rest.

It has since taken several steps to address a lingering dispute over an order to make it easier for rival software applications to tie into its Windows operating system, which runs 90% of the world's PCs and many corporate servers.

But the record fine underscores the commission's skepticism. "Talk is cheap," said Competition Commissioner Neelie Kroes. "Flouting the rules is expensive."

Microsoft's actions have stifled innovation and affected millions of people around the world, Kroes said. She called the latest fine "a reasonable response to a series of quite unreasonable actions."

Microsoft issued a statement saying the issues for which it was fined have been resolved. It could appeal the fine. But doing so would mean reverting to the confrontational legal strategy it is trying to make a break from, says Ted Henneberry, a London-based antitrust attorney at Heller Ehrman. "Both parties are trying to put this behind them and move on," he says.

The sticking issue: Regulators say the adjustments the company made in 2006 and 2007 in the royalty rates and terms set forth for tying rival programs into Windows fell short.

Last week, in a move Microsoft says was not related to the antitrust tussle, the company announced another round of adjustments to royalties and usage terms for tying into Windows as well as Office, its suite of clerical software. But the commission followed through and levied the record fine anyway.

Henneberry says the commissioners wished to let it be known that they "take offense because Microsoft didn't come up with these rates soon enough to please us." He called the fine "grossly disproportionate."

Separately, the commission must approve Microsoft's proposed takeover of Yahoo. Henneberry says the merger should be reviewed as a completely separate matter. "The merger does not involve conduct in the marketplace," he says. "The commission will have to look at the merger on the merits. It won't be, 'We don't like what you've done in the past, Microsoft.' "

By Byron Acohido, USA TODAY
Contributing: The Associated Press

Microsoft To Authorize Proxy Bid For Ownership Of Yahoo

reprint from Reuters with comments from Peak Positions SEO

Microsoft will authorize a proxy battle for Yahoo to convince the Web company's shareholders to agree on a takeover deal that the Yahoo board so far has rejected.

Microsoft is expected to raise its cash-and-stock bid originally worth $44.6 billion and seeks to nominate a slate of directors onto Yahoo's board. Microsoft had always maintained it reserves the right to exercise all options but declined to comment specifically on the rumor. Yahoo also is declining comment, saying it does not respond to rumor or speculation.

A proxy fight for Yahoo would cost Microsoft $20 million to $30 million. "Microsoft is doing the smart thing. It's giving both the carrot and the stick," said a Morningstar analyst. "The carrot was the big premium on Yahoo stock and now the stick is the threat of a proxy fight." Proxy fights waged by corporations to facilitate a hostile acquisition are rare and represent less than 5 percent of all proxy fights.

Microsoft Chairman Bill Gates claims there was "nothing new" in the Yahoo takeover process. "We've sent our letter and we've reinforced that we consider that it's a very fair offer," Gates said. Microsoft and Yahoo are at a stand-off in Microsoft's unsolicited bid to acquire Yahoo.

Microsoft has offered to buy Yahoo for $31 a share in cash and stock, a bid which Yahoo's board rejected, saying it undervalued the company. Microsoft countered by saying its offer was "full and fair," but did not say what it planned to do next. The deal is now worth $41.6 billion due to a decline in Microsoft's stock value.

The fees for paying lawyers and solicitation firms to wage a proxy fight are a fraction of what it would cost Microsoft to raise its offer. For every dollar the offer is increased, it would cost Microsoft an additional $1.4 billion. If Microsoft decides to launch a proxy fight, it would nominate a slate of directors to take control of Yahoo's board and support the company's proposal. The nominees would be voted on at Yahoo's annual shareholder meeting in June 2008.

A Yahoo-Microsoft proxy fight would be the largest corporate proxy fight in the last eight years. Microsoft would also risk alienating Yahoo's rank-and-file workforce by taking a hostile tactic. Unlike manufacturing companies with fixed assets, a key Yahoo asset is its engineering talent, and a hostile approach by Microsoft could lead to an exodus of Yahoo talent to Google or other Internet rivals.

Yahoo has announced that it had put in place severance benefits that would be given to all employees who might be laid off if the company is sold. In a securities filing, Yahoo said if an employee is dismissed without good reason within two years of change of control in the company, employees would continue to receive their annual base salary and certain benefits for at least four months and up to 24 months depending on their position.

"The employee severance promo is pure public posturing by Yahoo," said one analyst. A company targeted for acquisition often provides "golden parachutes" to appease skittish employees when the company is in play.

Microsoft has said it can wring out $1 billion in cost savings and revenue benefits from the Yahoo acquisition. Many expect some of the savings to come from a reduction in overlapping areas between the two companies. Microsoft shares have fallen further on the news to just over $28 dollars a share on the Nasdaq.

Microsoft stock is down 14 percent since their offer to buy Yahoo first went public. Yahoo's stock is also falling now at $29 dollars a share. The value of Microsoft's cash-and-stock offer for Yahoo now stands at just over $28 dollars a share.

One Microsoft employee uttered this bold statement, almost a warning the other day "What Ballmer wants, Ballmer gets, and believe me Ballmer wants Yahoo".

Network Solutions Making Bold and Empty SEO Promises

Desperate For Revenue Gains Network Solutions is Now Breaking The Golden Rule of SEO and Guarantees Top 10 Keyword Rankings.

Google Has Been Warning Website Owners For Years to Avoid Any SEO Company That Guarantees Top 10 Keyword Results. Yet despite the warnings from the search engines themselves Network Solutions Continues to Promote False Promises.

Here's Google's Warning on SEO's promoting top keyword placement:

No one can guarantee any top rankings on Google.

Also Google goes further to warn website owners to be wary of SEO firms and web consultants or agencies that send you email out of the blue.

Reserve the same skepticism for unsolicited email about search engines as you do for "burn fat at night" diet pills or requests to help transfer funds from deposed dictators.

Yet depsite these warning Network Solutions is sending unsolicited email messages to hundreds of thousands of website domain owners that include bizarre hype and false guarantees of Top 10 Search Results.

Beware of any top 10 placement guarantees, especially this one from Network Solutions that includes this lack of SEO talent, excuse-filled, legal disclaimer.

"Any Web site that is all Flash, contains frames/layers or adult content is not eligible for the guarantee. Guarantees may be voided for, among other reasons, Web sites that have downtime for one day or more, Web sites that have been altered after they have been optimized by Network Solutions, Web sites that are cloned, or that do not use 301 for redirects.

If customers do not respond to communications from Network Solutions for more than 60days, the natural search optimization project may be considered "abandoned" and payment will be surrendered in full.

For optimization packages ("Top 10 Search Results service"), Network Solutions guarantees a minimum number of top ten listings in one or more of 12 search engines within 10 months from completion date. Most engines will index your site in about three (3) months, but it takes time to gain the popularity and ranking needed to compete using competitive phrases. Network Solutions will only submit keywords to search engines in the United States. The search engines included are: AOL, AlltheWeb, AltaVista, Ask.com (formerly known as AskJeeves), Google, Hotbot, IWon, Looksmart, Lycos, MSN, Netscape, and Yahoo!. The minimum number of top ten listings guaranteed is 5 for the 20 keyword phrase package, 10 for the 30 keyword phrase package and 20 for the 50 keyword phrase package. There is no guarantee for the 10 keyword package. The guarantee is a full money back guarantee, subject to these and the other terms and conditions of our Services Agreement, provided at the 10 month mark from date of completion if results are not obtained. (10 months?) In no event will Network Solutions be liable to you for any lost profits, lost savings, or other incidental or consequential damages arising from the optimizations services provided.

This service(s) does not guarantee any sales or traffic to your Web site. Traffic and sales depend upon the demand for your particular product or service, the design and layout of your Web site, and many other factors that are beyond the control of Network Solutions. (top 10 keyword positions are definitely our of Network Solutions control, which search engine do they own? oh that's right, they don't own any search engine, they simply launch Google AdWords on parked domains in an attempt to profit on brands and trademarked protected names).

Network Solutions services do not include the paid submission fees that some engines charge for inclusion. Network Solutions is not affiliated with these submission services in any way (or any search engines for that matter). You may opt to pay these fees directly to the search engine for inclusion. Additional fees may apply for changes, modifications, updates, and optimization alterations that exceed the scope of these optimization services.


Be wary of any top 10 keyword position guarantee, from any party including: Network Solutions.

Microsoft Offers 45 Billion To Buy Out Yahoo

As long predicted by Peak Positions - Microsoft Bids For Yahoo.

Here's a video clip on Microsoft's formal offer to buy Yahoo. This CNET recap contains many of the details and some interesting interviews. One consultant in this piece actually calls Microsoft "desperate", we were wondering how she actually defines desperate ... let's see $56 Billion in liquid assets and much more in the immediate product pipeline makes Microsoft desperate in what way?

Well we all know the Redmond crowd took a nap, missed the bus and is more than a few years late in arriving at the keyword search party. It is still quite a stretch though to term Microsoft as desperate. Yes, Ballmer and Gates are making many new moves to fend off the open office movement, mashups, and online software delivery.

Yet this move to take over Yahoo further signals MSN's intent to increase their share and foothold in the keyword search industry and is not a move of desperation. Microsoft's move to buy Yahoo is a long calculated projection on the future evolution of their enterprise. Microsoft is only beginning to wake up and understand just how powerful the keyword search medium truly is.

MSN has been weighing two options for several months in seeking to become a meaningful search engine:

1) Dedicate more time, staff and resources to gain more share of search.

2) Spend Cash and Stock to acquire more search share immediately.

This offer to buy Yahoo symbolizes Microsoft's intent to address keyword search in the short term, increase their share now and shore up any weaknesses before Rupert Murdoch or Michael Bloomberg decide to apply more resources and further ignite the search wars.

What strategy does the MSN senior management team have outlined for pulling in the Yahoo portal? Do they have the skills and are they prepared to overhaul search strategies at both of these failing search engines?

First Things First ... Here's Mocrosoft's Bid For Yahoo

Google AdWords Unveils Two New Image Sizes

Google’s AdWords team announced they have been testing two new image ad formats. The first, a large 2560 x 1920 image is designed for advertisers who want to appear “larger than life,” according to AdWords Developer Arnold Ferguson. “Advertisers have been bugging us since November for a large-format image ad that can showcase photo quality 5-megapixel images. It’s a little bit larger than your standard banner ad, but I think if it makes advertisers happy, and we can charge higher click rates, it will make our publishers happy as well.”

As part of the test, Google has been serving 2560 x 1920 ads on sites like ultrahighresolution.com for online digital camera retailers wishing to advertise unreduced megapixel-sized images.

The second format, a 1 x 1 pixel ad can be purchased in blocks of ten by keyword. “We’ve actually been working very closely with pixel ad inventor Alex Tew on this one,” said Ferguson. “After seeing all the aimless pixel ad sites out there, we knew we needed an original approach. Unlike all the copycat pixel ad sites, integration with our keyword bidding system will us serve pixel ads contextually on nearly any site in the AdSense publisher network.”

In order to supplement their six-billion dollar annual revenue stream, Google also plans to publish a pixel advertising site of their own in mid-April, and has registered the http://www.milliongooglepixel.com domain to display AdWords pixel ads. Google AdWords expects the new sizes to be available to all AdWords users in the next few weeks.