Microsoft Acquires England
Microsoft is pleased to announce its recent acquisition of England, ™ a leading country. England will bring many competitive advantages to Microsoft, including the world’s leading language, valuable real estate, two of the world’s leading universities, and a strong military force. Microsoft has announced plans to continue offering England’s products in America and abroad, with some minor changes to the license terms. These changes include :
- English™ will no longer be made available on a public domain basis. All users of English™ must register with Microsoft; a trial version of English™ will be made available with a limited vocabulary.
- Crumpets will be promoted as a new industry standard for lunch. All Microsoft products will fully support Crumpets At Work (“CAW”).
- Other changes will be announced in the near future.
“England has several priceless assets, the most valuable of which is English, which we plan on embracing, enhancing and extending.” Microsoft will offer several editions of Microsoft English :
- Basic — Basic vocabulary which can be used by short-term visitors to an English-speaking country
- Home — An additional 5,000 words in addition to the Basic edition
- Business — Includes all words from the Home edition plus all words ordinarily used in simple trade businesses
- Professional — Adds all words used by most of the professions, including law, medicine and engineering
- Premium — The same as Professional, but sounds more extensive, so Microsoft is charging more
- Extended — Every word in the English language, including all words in the Oxford English Dictionary
- Ultimate — All of the words in the Extended edition plus Old and Middle English
Microsoft also announced English Express, a free subset of the Basic edition, comprising 1000 of the most popular English words. Microsoft will offer 60 day trial versions of all of these editions, after which the user is required to purchase a license or alternatively to stop speaking English. In addition, Microsoft has announced English Spark, which provides approved start-up companies with a three year license to use the Ultimate edition of English at no cost. Finally, Microsoft will be instituting a program for non-profit organizations and schools, where they can obtain the Professional and Premium editions at a substantial discount.
What about American English, which is different from British English? “We think that a universal, world-wide standard is really important. Accordingly, our lawyers will be soon sending cease-and-desist letters to those who use English that has not been approved by Microsoft.” The President of the American Bar Association said he was delighted. “Microsoft does not have enough in-house lawyers to mail cease-and-desist letters to every U.S. citizen. They will have to hire an army of outside law firms to send such letters and then to prosecute those who refuse to comply. Microsoft has single handedly solved the current unemployment crisis for recent law school grads in the U.S.”
“We intend to streamline the use of language throughout the world. Currently there are over 150 languages spoken on this planet, which we believe is highly inefficient. We want the entire world (and other worlds as humans explore the galaxy) to speak Microsoft English.” Just as the computer industry operates more efficiently by having almost all computers run Microsoft Windows, we believe the entire world should speak and write Microsoft English. As for less developed countries that cannot afford to license Microsoft English, Gates stated that lower cost licensing programs will be available for those in need. “Our goal is to get them hooked on Microsoft English — even if we have to give it away. As these countries develop economically, we can increase their licensing fees over time.” What if they are unable or unwilling to pay? “Then they cannot speak or write English. We have valuable intellectual property to protect. It cost me a lot of money to buy this little island.”
Microsoft intends to institute “reasonable” licensing terms within the next 90 days. Ballmer noted that Microsoft will first focus on Fortune 500 companies. “It will be less expensive for them to pay Microsoft a small reasonable licensing fee than to have to switch their business operations to another language. For example, it would make much more sense for Exxon to pay Microsoft an annual royalty of 1 percent of its revenues than to undergo the cost of converting all of its manuals and internal correspondence to another language. In addition, if they do not sign a suitable licensing agreement, they will not be able to advertise to their customers in English, which means the entire U.S. market would be off limits to them.”
“We intend on offering many enhancements to the English language. At the same time, a few English words will be phased out, such as open software, free software, Linux, Unix, Java, and other archaic terms.”
“One key advantage is that if everyone speaks English,™ Microsoft’s revenue sources will not be limited to people who use computers.” Gates commented, “More than half the world’s population does not use a computer, and currently Microsoft makes no money off these people. What good are these people to Microsoft? What purpose in life do they serve if they are not benefiting Microsoft’s shareholders? Everyone speaks a language, however. If we can make that language Microsoft English,™ every person on the planet will be contributing to Microsoft’s profitability.”
Given Microsoft’s financial ambitions, and the fact that sales of Windows and Office have plateaued, analysts wondered if Microsoft would attend to export Microsoft English to other planets. Gates replied, “Sure, I am known for thinking long-term, but not too long term. We will wait for evidence of intelligent life on other planets, and once it has been confirmed, you can assume Microsoft will pounce on the opportunity. One of the key issues will be, “Will we be able to enforce our intellectual property rights on Mars or Mercury?”
Microsoft noted that it now owns the rights to all books written by English authors. “We will soon be amending English copyright law. Even without such amendment, it is our position that since there are no clear descendants of William Shakespeare, England owns the rights to his works, and since we now own England, we now own these works. That also includes Virginia Woolf, Charles Dickens, Jane Austen, William Blake, Lewis Carroll, C.S. Lewis and Tolkien. All of these we now own, and we will soon be contacting the publishers of their books to seek reasonable payments from them.” In a separate announcement, Microsoft’s General Counsel noted that Microsoft also now owns the rights to any book, magazine, publication and monograph written in English, even if the author is alive and even if the author is not English by nationality. “Given the number of books published in English, with just a 2 percent royalty, the entire acquisition pays for itself in three years. And we get everything else for free.”
Microsoft is currently investigating how far it can stretch its rights. A Microsoft Vice President, who spoke off the record, said, “Consider open source software, for example. Whichever programming language is used, all of it is written using English commands, and obviously the documentation, as pathetic as it is, is written in English. Since we now own English, don’t we also own all of the open source software that is written in English? If our position is upheld, we would own Linux, Apache, MySQL, WordPress, Subversion, all of it.” Another Microsoft executive assured reporters that Microsoft would be very reasonable in its licensing fees for Linux, “certainly not much more than the cost of licensing Windows, but we would not provide any technical support. We would also require them to pay a catch-up payment where they pay us for the last five years of their use of Linux.”
Microsoft now owns all English colleges and universities. Gates was gleeful. “Since I was a kid, I have wanted to own Oxford and Cambridge. Now I do.” Microsoft noted that it will quickly amend those universities’ regulations so that all intellectual property created by Oxford and Cambridge faculty, researchers and students are now owned by Microsoft. “We will, as always, be reasonable and we are quite willing to license this IP back to them at a fair price.” Microsoft noted it will immediately eliminate the teaching of open source software at any English college and university. Gates pointed out, “These students should be learning Visual Basic and C#, not Ruby, Lisp, Perl, Java and other inferior languages.”
One change will immediately be instituted by Microsoft. “Currently students attend English universities yet they do not pay tuition. This is ridiculous. If students in the U.S. pay $50,000 to attend Harvard, Yale or Stanford, British students should do the same to attend Oxbridge.” What about those students who cannot afford to pay such a high level of tuition? Gates responded, “Look, I am not totally heartless. Microsoft will be introducing its lifetime earnings program. They can attend any British university for free as long as they agree to pay us 20 percent of their annual earnings for the rest of their lives. I’m even willing to offer a one year moratorium after graduation.”
Ballmer also pointed out that Microsoft now owns English prep schools. “Many of them are not very good, and most of them we will sell or close down. But there are several we want to keep, particularly the top ones, such as Eton, Harrow School, Winchester College and Durham School.” Ballmer added, “Our plans are for the more prestigious ones to change their management practices. Admission should be based solely on ability to pay, nothing else. We will have a Dutch auction where spots are auctioned to the highest bidder.” Reporters asked if scholarships would be eliminated. “Of course we are going to get rid of these scholarships; how do they contribute to Microsoft’s profitability? However, we will make an exception for gifted computer science students, assuming they are willing to sign a pledge never to use open source software.”
What about British students who insist on using open source software? Gates responded, “Well, that is what our newly-built reeducation camps are for.” A few days later, a senior public relations officer from Wagner Edstrom called to clarify that Microsoft is no longer using the term “reeducation camps,” as “some might mistakenly compare these with the reeducation camps of North Korea or North Vietnam. We are now using the term ‘attitudinal adjustment centers’.”
In its just-released 10-K, Microsoft disclosed that it has recently approached several leading American universities about a possible acquisition, and all of them have turned Microsoft down. Gates was particularly bitter about Harvard’s refusal to negotiate. “I went to that damn school and they would not even make us a reasonable counteroffer. Just because our opening offer was below the liquidation value of Harvard’s current endowment does not mean we were not negotiating in good faith.” When pressed, Gates admitted he hoped to simply buy Harvard based on its endowment, and then “liquidate the endowment and the rest of the university we would have gotten for free. Harvard Yard alone is worth at least $1.2 billion. Widener Library has about 15 million volumes. Assuming I could sell each volume for an average price of $20, that’s $300 million. I could easily auction off the Fogg Art Museum collection for at least $500 million.”
Gates mentioned that Microsoft is interested in acquiring smaller colleges and universities, provided they are of high quality. “But the price has to be right, I am not going to pay $3 billion to acquire Williams College or Amherst.” Gates mentioned that the top women’s colleges, such as Wellesley or Smith, would be of particular interest. “Right now, there are not enough girls and women studying computer science. If we acquired Wellesley, we could require, er… encourage all of their students to study computer science. That would give us a recruiting pool of 750 smart women per year to hire from. And of course, as part of their graduation requirements, all of them would have to agree never to work for Google.”
English Common Law
Ballmer boasted that Microsoft now owns English common law, and that U.S. law is based on English law. “If we reform and revise English common law, to, ahem, clarify certain policies concerning breach of contract, fraud, piracy and antitrust, we believe that U.S. law must follow. It’s similar to the concept of inheritance in object oriented programming. We can quickly clear up legal uncertainty so that, for example, Microsoft is never again sued for patent infringement, no matter what we do.” He added, “Essentially all of U.S. law is based on English common law and thus Microsoft is entitled to a reasonable licensing fee from all U.S. courts and U.S. law firms. We are open to alternative arrangements, however. If a court or law firm would agree to a 99 year licensing agreement for Microsoft Windows and Office, with suitable price escalators, we might waive the licensing fee for any laws based on English common law.”
One of the changes Microsoft will introduce immediately is a streamlined management process. “Let’s face it, having a King and a Queen, a Prime Minister, Parliament (with the House of Commons and the House of Lords), an independent judiciary, plus local and municipal governments, all of this makes for an inefficient governance process. It is far more efficient to appoint one Microsoft Senior Vice President to be in charge of England, with that executive reporting to our CEO.” Microsoft projected over € 3.2 billion a year in administrative savings by abolishing English government. Microsoft’s CFO gleefully noted, “That change alone turns a 6.7 times EBITDA deal into a 5.9 times EBITDA acquisition.”
“As for the English monarchy, we are still analyzing their profitability. It might make sense to keep them around, given the royalty stream the monarchy could generate if properly managed. The problem is that we currently do not have accurate financial statements, let alone consolidated financial statements, as the monarchy has never prepared even basic income statements. Obviously, that has to change immediately. Starting immediately, we will require the monarchy to submit monthly P&L statements using our centralized ERP system.” Ballmer also noted that if Microsoft keeps the monarchy around, “they will be required to abide by our standard per diem expense account restrictions. Starting today, each of them will fly coach.” When one reporter noted that senior Microsoft executives sometimes fly in chartered private aircraft, Ballmer ordered Microsoft’s security guard to throw that reporter out the window. “Unfortunately, our press conference was held on the second floor, going forward I will have these conferences on the tenth floor. I cannot image any reporter surviving a ten floor drop.”
As in many large acquisitions, divestiture of some smaller components is inevitable. Ballmer noted that Microsoft is already negotiating with Argentina, under which Argentina would acquire the Falkland Islands from Microsoft. “In 1982, Argentina went to war with England over these tiny islands. Frankly, they have no strategic value to Microsoft so we might as well sell them. At the same time, I don’t want to sell cheap, particularly since those islands seem to have a lot of symbolic value to Argentina.” Ballmer pointed out that he is open to a combined transaction. “If Argentina was willing to license Microsoft English right away, I would probably just give the damn islands to them. It would be hugely advantageous to Microsoft if Argentina provided a beachhead for Microsoft English this year, since the entire continent currently speaks a different language, namely Spanish. I cannot make any money off of Spanish, particularly since Spain refused our reasonable offer to acquire it.”
England has 13 other colonies, including the British Virgin Islands, the Cayman Islands, Gibraltar and Anguilla. Ballmer mentioned that he has appointed an internal committee to “review the strategic value of each of these assets.” He added, “Every colony will be evaluated using a BCG growth-share matrix to determine if they are a star, a cash cow, a problem child or a dog. If a colony is a star, I will invest in them. If they are a dog, I will sell them off, and if they are no buyers, simply close the colony down and relocate its entire people.”
One of the more overlooked aspects of this acquisition is that Microsoft now owns England’s 160 nuclear weapons. Microsoft assured reporters that these weapons would be used only for defensive purposes. “We have no plans to target any of our competitors, such as Apple or Oracle, but we reserve the right to do so in the future should circumstances warrant.” One vice president noted that Microsoft is willing to offer a “no first use” policy. Under this policy any company, including any of Microsoft’s competitors, can obtain an iron clad guarantee that Microsoft will not initiate a first strike against them, providing that they pay a small annual royalty of one percent of their revenues. When asked, “Does this apply to Google?” Ballmer threw a chair at the reporter and screamed, “Hell no! Google needs to be dealt with, once and for all. I will personally kill Eric Schmidt and every other Googler with my bare hands.”
Some analysts pointed out that Microsoft would most likely use, or threaten to use, nuclear weapons against government regulators rather than Microsoft’s competitors, particularly since Microsoft has already destroyed most of its competitors. Gates admitted, “To be candid, the U.S. Department of Justice and the EEC Antitrust Commission have been a total pain in the neck. In the past, when we have negotiated with them, we felt they had the upper hand, and that is not a role I am used to. Now the playing field is more equal.” Gates pointed out that England’s nuclear weapons gives Microsoft a stronger hand in dealing with U.S. courts. “Let’s just say we were very unhappy with Judge Jackson’s decision to break Microsoft up, which thankfully got overturned on appeal. In the future, should a lone trial judge consider doing anything similar to that, we might have an ex parte communication with him or her, pointing out that we now have very precise targeting capability and with our neutron bomb enhancements, we could wipe out the entire workforce in his courtroom but while leaving the building standing.”
Some analysts believe that U.S. antitrust enforcement against Microsoft has tapered off and Microsoft is now more worried about the EEC Antitrust Commission. “In the past, we have participated in various standards committees and we are willing to continue to do so, as long as they are reasonable and basically accept our position on everything. We sincerely hope the EEC will adopt Microsoft’s policies. If they do not, we cannot rule out the possibility of withdrawing from the EEC, a hostile tender offer, and/or the use of our enhanced military arsenal.”
Microsoft pledged that in the event of the use of force, Microsoft would “most likely” start with conventional weapons before escalating to nuclear weapons. If the negotiations with the EEC do not go well, would Microsoft really take out Paris or Bonn? “Heavens, no. Well, at least not initially. We would start with a few less important cities, such as Madrid or Florence, and then give the EEC at least three weeks to come up with a more reasonable bargaining position.” Gates commented, “I have been reading a lot of history, and I think that in World War II President Truman made a mistake in dropping the second atomic bomb on Nagasaki so quickly. I would give the EEC at least three weeks to think it over.”
When analysts questioned whether such countries might target Microsoft’s headquarters in Redmond, Washington, Gates replied that Microsoft has already developed a plan to quickly disperse its employees around the country should Def Con IV ever be initiated. “We have also hired some of the top anti-ballistic missile engineers in the world.” When one technology analyst cracked, “Since reliability would be so important, I’ll bet these anti-ballistic missiles will run on Linux, rather than Windows,” Gates responded, “No comment” and then ordered that that analyst be permanently banned from the premises.
Microsoft went out of its way to assure reporters that any decision by Microsoft to use nuclear weapons would require the explicit approval of both CEO Steven Ballmer and Chairman Bill Gates. “We feel there is more accountability that way. Within the United States, one man — the President — can unilaterally decide to launch a first strike, without approval from anyone else. At Microsoft, both Gates and Ballmer must approve such an important decision.” One reporter asked if such a monument us decision should at least be approved by Microsoft’s Board of Directors. Ballmer was apoplectic. “Board of Directors?? Screw the Board of Directors! For over 20 years I played second fiddle to Billy, now I want to run my own show! No one tells me what to do!”
Many analysts were skeptical whether a private company such as Microsoft can legally own nuclear weapons. After throwing a trash can at the reporter who raised this issue, Ballmer screamed, “Have you ever heard of the Second Amendment? In District of Columbia v. Heller, Justice Scalia says there is a constitutional right to bear ‘reasonable’ arms. The U.S. Supreme Court extended those rights in McDonald v. Chicago. We consider nuclear weapons to be reasonable arms. It’s not like we are acquiring biological or chemical weapons.” Another Microsoft senior executive, who asked not to be identified, admitted, “Yeah, our legal position on this issue is a total joke. Screw the legalities; obeying the law is something Microsoft has never been particularly concerned with. Might make right.”
Gates reiterated that Microsoft is always open to purchasing technology rather than developing it. “We would only want to purchase hydrogen bombs; atomic bombs just don’t have enough firepower. The weapons specialists we have at Microsoft Research are working on other weapons projects. This will allow us to quickly enhance our current arsenal of nuclear weapons.”
When analysts pointed out that the U.S. and Russia have far superior nuclear stockpiles than England, Gates scoffed. “What makes you think we will be satisfied with England’s current nuclear arsenal? Russia is in such a state of disarray that I can purchase half of their nuclear stockpile for less than 10 percent of their fully amortized development cost. In addition, I have assigned three dozen of Microsoft Research’s top scientists to our new nuclear weapons development program. And as a last resort, it they cannot come up with something, Microsoft will do what is always does: steal someone else’s technology. Everyone knows that all of the U.S. nuclear labs — Los Alamos, Lawrence Livermore, Sandia — use Microsoft software and what makes you think we did not place a back door for us to access their file servers and download all of their files and data?”
Many reporters were astonished at some of the positions Microsoft has taken as a result of this acquisition. One reporter quipped, “Well, the United Kingdom has 51 million people, I suppose you own all of them.” Ballmer responded, “During our acquisition due diligence, our attorneys looked at every legal issue. The case law was unclear as to whether in buying England, we also own the people who reside in England. We did some historical analysis and concluded that slavery was not as profitable as people thought, so we decided not to pursue any rights we might have in this regard. Accordingly, Microsoft will be sending each resident of England a covenant-not-to-sue under which Microsoft definitely waives any rights it may have to own these people. That does not apply, of course, to any intellectual property they produce, which we do own.”
Negotiations with Other Countries
Microsoft emphasized it is keenly interested in further acquisitions. “We are particularly interested in buying a beachhead and then acquiring surrounding countries. For example, we might acquire Brazil and then seek to acquire all of Latin America. There are significant economies of scale here. It is far more efficient for Microsoft to own an entire continent than just one country in that continent.” At the same time, Ballmer emphasized his fiscal discipline. “We simply will not overpay, as I proved with Yahoo. When the price got too high, I simply walked away. We will not overpay for any country or university, no matter how much they would enhance the Microsoft portfolio.”
Analysts immediately asked the most obvious question: What about acquiring the United States? Microsoft’s CFO said, “We did consider making a hostile tender offer to acquire all of the United States, but frankly even for Microsoft, the cost was simply too high.” Analysts speculate that perhaps Microsoft should have not made its $32 billion cash dividend and $30 billion stock buyback in 2004, and that if in additional if Bill Gates chipped in with his personal net worth, an acquisition of the U.S. would be affordable.
Most of Microsoft’s competitors decried Microsoft’s move, but almost all of them insisted on talking off the record, claiming they feared retaliation from Microsoft. Apple’s CEO stated, “Everyone knows that Microsoft is not an innovative company, they simply buy technology that they are incapable of developing themselves. They could not develop nuclear weapons on their own in a million years, nor could they ever develop a language as complex and rich as English, so they simply buy the country.”
Oracle’s Larry Ellison was also critical. When one reporter pointed out that Oracle is far more acquisitive than Microsoft and that most of Oracle’s revenues are based on acquisitions, while most of Microsoft’s revenues are based on organic growth, Ellison ordered an aide to have the reporter shot, along with the reporter’s dog. He then added, “Just kidding. Kind of. Well, at least make certain his dog is not killed.” Another reporter mentioned that Gates claims Microsoft have the precise latitudinal and longitudinal coordinates of Ellison’s houses in Woodside and Atherton, California. Ellison did not appear to be worried. “Given the low quality of Microsoft’s software, I doubt they could target a missile within 5 miles of my house.” Several reporters subsequently noted that despite Ellison’s professed lack of concern, contractors at Ellison’s primary residence were seen building underground tunnels, which would provide protection from any Microsoft missile attack. Ellison subsequently claimed he was simply building a large underground art studio, but it was apparent that none of the reporters accepted his explanation, particularly after one reporter asked Ellison about his purported art collection and Ellison could not name one painting he supposedly owns.
There was speculation that Google would react by seeking to acquire France or Germany. Eric Schmidt noted, “We prefer to innovate ourselves rather than rely upon acquisitions. However, Google cannot rule out any acquisition if the price is reasonable. Given the drop in value of the Euro as compared with the U.S. dollar, one should assume we are at least considering the purchase of one or two smaller European countries.” Sergey Brin added, “For any large acquisition, one must always be conscious of the post-merger integration issues. How comfortable would the citizens of, say, Italy be if we required every one of them to take the Google IQ test?”