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In computer news this week 05/23 /2012
The Facebook Flop Vs. Microsoft’s deal of the century – it depends on Lady Luck
The Facebook IPO was a bust, and days later the stock is selling for less than the IPO price.
Bad luck that GM had pulled their Facebook advertising just before the IPO, but there were many other factors too.
Success in business sometimes depends on luck, and Microsoft had much better luck in their early business evolution when they were working with IBM to develop the IBM PC.
Fate smiled on Microsoft twice in these proceedings. First, IBM was somewhat leery of dealing with what they considered a somewhat flakey tiny software company, but it turns out that in addition to Microsoft's proven reputation as a viable language vendor, Mary Gates - Bill's mom - had served on the national board of United Way with one of the involved IBM senior executives - providing the validating social reference that they were working with "Mary's Gates' boy Bill".
The second fateful event was even more interesting and involves yet another Washington State connection in the microcomputer revolution. IBM ended up asking Microsoft to write the operating system for the first IBM PC.
Microsoft soon realized that they knew nothing about writing an operating system and began to panic, but someone remembered talking to a Seattle hardware hacker who had already built a prototype computer using the new Intel 8086 and who had mentioned he was tired of waiting for Digital Research - so he had gone ahead and written his own operating system for it.
Ironically, this individual - whose name was Tim Patterson - had previously talked to Microsoft employees and had been very interested in the File Allocation method that Microsoft Basic used. Patterson worked for a local company named Seattle Computer Products and had indeed written his own operating system for his prototype 8086-based computer which incorporated a similar File Allocation system for disk management - and he had named it QDOS - for quick and dirty operating system.
Microsoft - in the deal of the century - bought Seattle Computer Products "Quick and Dirty operating system" for a mere $ 50,000 - without Seattle Computer Products knowing it was for IBM - and then proceeded to talk IBM into letting Microsoft also license it and market it separately from the IBM PC project. Microsoft had the market savvy and already realized the potential profit - or "revenue bomb" - their own operating system and languages might generate.
Thus Microsoft’s MSdos Operating system – named PCDOS for the IBM PC – became their cash cow, and revenue from their operating systems, which evolved into Windows, sustains them through today.
So Lady Luck smiled on Microsoft, but it looks like she’s still contemplating Friending Facebook …..
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This is Frank Delaney
(C) 2012 MTA Micro Technology Associates