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Microsoft Shown Involved with Baystar and SCO
Posted by
Zonk
on Sun Oct 08, 2006 12:35 PM
from the cheeky dept.
from the cheeky dept.
baryon351 writes "Back a few years ago, when SCO looked like it was hemorrhaging cash, a surprise investment came out of the blue from venture capitalists Baystar. They invested $20 million in SCO and aided their anti-Linux cause, enabling McBride & co. to continue with (now shown incorrect) claims of line-by-line code copying of SCO IP in Linux. Now one of IBM's submissions to the court reveals Microsoft was behind it after all. Baystar's manager says about Microsoft's Richard Emerson: 'Mr. Emerson and I discussed a variety of investment structures wherein Microsoft would backstop, or guarantee in some way, Baystar's investment ... Microsoft assured me that it would in some way guarantee BayStar's investment in SCO.' Despite the denials about their involvement, Microsoft helped SCO continue this charade — and on top of that halted all contact with Baystar after the investment, reneging on their guarantee."
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Slashback: ICANN, OLPC, Agile, Yahoo, BayStar 84 comments
Slashback tonight brings some clarifications and updates to previous Slashdot stories, including: Spamhaus case tests ICANN; Getting your own OLPC (CM1) computer; Followup Agile commentary from Steve Yegge; Yahoo's time capsule permit revoked by Mexico; and Microsoft denies BayStar connection. Read on for details.
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Oh no! It can't be! (Score:5, Funny)
Re:Oh no! It can't be! (Score:5, Funny)
Parent
Suspicions Confirmed (Score:5, Insightful)
I remember MS butt-boys flaming me for suggesting MS was financing this a long time ago.
Re: (Score:3, Insightful)
Re:Suspicions Confirmed (Score:5, Insightful)
You mean the article doesn't say that Microsoft funded anything. At almost the same time as the Baystar deal, Microsoft and Sun both paid SCO large amounts, totalling something like $20-30 million between them, apparently for Unix licenses of some kind. Sun obviously needed a Unix license to put out Solaris. What Microsoft did with whatever it paid SCO $millions for, seems a tad unclear.
(further to that, SCO's court filings in Utah relating to what these two amounts were for directly contradicted their own filings to the SEC, and now Novell has filed a motion for partial summary judgement claiming that 95% of this money is owed to them under the Asset Purchase Agreement that sold the Unix business to the Santa Cruz Operation. SCO only has about $10 million in cash and cash equivalents so if they win, it's game over for SCO).
Parent
Re: (Score:3, Informative)
If someone wants to assert that Sun paid the money to finance SCO's lawsuit, I've neither seen nor heard of any specific evidence that contradicts that assertion. Of course, supporting that assertion is another matter. The only evidence to support
Re:Suspicions Confirmed (Score:4, Interesting)
It's probably worth noting that individual traders in financial services companies often have a shocking degree of independence, to the point that the lack of oversight has to be classified as negligent on the part of the company. There are several centuries-old banks which have gone under due to the irresponsible trades by a single trader who managed to aquire star status on the inside, usually by getting away with a couple of extremely risky trades in the first place.
It's not at all impossible that someone star-strucked by Microsoft and tempted by the potential of getting a risk-free deal may have accepted some bogus handwaving that they don't want a paper trail or whatnot, or simply might have been too intimidated to push.
Parent
misdirection fud gets modded up Informative (Score:4, Insightful)
"It's not at all impossible that someone star-strucked
"Mr. Emerson and I discussed a variety of investment structures wherein Microsoft would 'backstop,' or guarantee in some way, BayStar's investment.... Microsoft assured me that it would in some way guarantee BayStar's investment in SCO."
That's an agreement between Larry Goldfarb, managing general partner at BayStar and Richard Emerson, senior VP of corporate development at Microsoft and not some bogus irresponsible star-strucked handwaverer.
Re:Suspicions Confirmed (Score:4, Informative)
Parent
March 2004:A plea for relief from Microsoft (Score:5, Informative)
Surpise? (Score:5, Insightful)
I have to admit to being curious why any company would get involved in a business deal with Microsoft. I can understand being their customer, but willingly partnering with a company that stabs partners in the back on a regular basis just seems crazy. "Yes, just step over those corpses on the way into the conference room -- pay no attention to the ghost of Stacker rattling those noisey chains, I assure you this is a win-win situation!"
Re:Surpise? (Score:4, Interesting)
Parent
Re:Surpise? (Score:5, Insightful)
Hunter S Thompson once described a politician running for the president to a moose during mating season. Normally moose are wily creatures. If you go hunting for them they are hard to spot, they are supremely aware of their environment, they can hear and smell you coming from miles away. Once a moose is in mating season though all that flies out the window. The second they hear or smell anything that even resembles a female moose they will charge towards her like... well a crazed moose!. They will crash throught the bush making all kinds of noise, they will leave chunks of their flesh on trees that they broke on the way. They just don't care, just want that female!.
Just as a politician becomes like a crazed moose when running for the presidency a CEO becomes like a crazed mooose when somebody waves money in their face. Once they see that money mind blanks of all other thoughts. Their memory, ethics, morals, bodily functions, wife, children, the planet, shareholders, employees, everything else gets driven out and is replaced with the smell of that money.
When MS waves money in front of a CEO the CEO stops thinking. He completely disregards the dozens of times MS has backstabbed it's partners and thinks to himself "it won't happen to me, those other CEOs were stupid, I am smart and handsome and I deserve this".
I don't want to sound negative, it's only human (and mooose) nature. We would all probably act the same way if somebody waved enough money in our faces. Soon all thoughts of right, wrong, morality, history, and diligence would be replaced by the mansion in the hamptons or that DB9 we have been salivating about.
Parent
Acronym weirdness (Score:3, Funny)
You would sell your soul for a 9 pin serial plug? Some people have odd fetishes I suppose. Here - have some old computer mice and keep your distance.
We've been saying that for a long time... (Score:5, Interesting)
No matter if SCO loses as they should, the millions of dollars their phony lawsuits cost others, the doubt they cast over all of 'free' software, and the delays in some companies considering a move to Linux until Vista could finally be made (allegedly) viable, definately helped Microsoft.
Hopefully there will be enough of a tie-in for Microsoft to be pursued for their part in the charade.
--
Tomas
I suspect so... (Score:5, Interesting)
for going after each and every party involved with this charade for it's worth. I'm hoping so
myself- it'd be nice to see all the people responsible for this whole lame affair being pilloried
for their efforts.
Parent
Duh (Score:5, Funny)
Oh, Baystar? Nevermind.
In the words of Nelson Muntz... (Score:5, Insightful)
Prince iples (Score:5, Insightful)
There's nothing feel good about it - this is business and unless a government steps in and regulates the industry, well, it's all about the benjamins.
IS it illegal (Score:3, Interesting)
Afraid so... (Score:5, Interesting)
be an effective monopoly under those acts in a Findings of Fact from a prior Antitrust Trial, with
really no change in the circumstances, they're at violating the law again. (Small surprise that-
with nothing but slaps on the wrist, they really don't have any incentive to NOT do it again and
again, with more flagrant violations of the law being done over time.)
Parent
Advantages of the SCO lawsuit (Score:5, Informative)
The SCO vs. IBM lawsuit has done quite a bit for open source.
The SCO lawsuit has validated open source and the GPL. We don't have to worry about that problem any more.
Re: (Score:3, Insightful)
There was never any real doubt about the legal strength of the GPL. It's always been on much firmer ground than a lot of software licenses out there, because it's not a EULA. It's simply a contract that's offered to people, and if they decline the contract, they don't get the extra rights the contract offered them. EULAs are vulnerable to challenges on the ground that they're contracts of adhesion [wikipedia.org], which are held to a higher legal standard in order to be enforceable.
It's interesting to compare Linux with
The GPL is a license, not a contract (Score:3, Informative)
The FSF begs to differ on the latter.
Prof Eben Moglen is the Free Software Foundation's attorney, and of course is strongly involved in framing the GPL's legal content. And in the detailed article "The GPL Is a License, not a Contract" [lwn.net], Prof Moglen says very clearly that:
" The GPL, however, is a true copyright license: a unilateral permission, in which no obligations are reciprocally required by the licensor."
It really doesn't get much clearer than that. Rea
Thats brilliant (Score:5, Funny)
My 7 year old daughter promises a lollypop to her younger brother if he will go and kick someone she is mad at. When he comes to collect, she tells him "No".
Well done Microsoft, and shame on Baystar for falling for such a cheap plot.
Ob. Futurama (Score:5, Funny)
So after this... (Score:5, Insightful)
C'mon guys, you crucified Sony for less.
Re: (Score:3, Funny)
Rich Emerson Corpus (Score:5, Interesting)
Microsoft issued an relatively unusual press release in mid-September 2003, announcing that Emerson was leaving to "spend more time with his family". The announcement got published in the New York Times, and Emerson's supposed end date was August 31, 2003. He would consult on "complicated transactions".
Emerson's position as "SVP Corporate Development" reporting directly to Steve Ballmer was abolished on his resignation, and the Corp Development division demoted to supervision by the CFO. After a period, Brian Roberts, Emerson's long time deputy was promoted to run the division. Robert's left Microsoft in 2005 to work with Emerson at his new position at Evercore Partners. Roberts and Emerson have been associated since running telecomunications portfolio in the dot-com days at the investment bank Lazard-Freres.
Emerson made political contributions to the Bush re-election campaign in mid-September 2003, and listed his occupation as Microsoft Executive, so his August 2003 resignation is a bit atmospheric or conveniently backdated.
Emerson had been given a 12 Million dollar loan as a signing bonus to MSFT in 2000. A mid-September 2003 proxy noted that he was paying the loan back with vested stock options. The options were underwater, but had a positive Black-Scholes valuation based on their future potential to be profitable. Emerson used this positive valuation to retire the loan on a cash free basis.
Emerson had little public trace through most of 2004, and then acquired a position at Evercore Partners, a mergers and acquisitions investment advisor. Evercore has since IPO'd, and is traded as EVR.
Emerson and a Baystar principal Andrew Farkas were both listed as advisors/investors in a NYC Venture, I-Hatch Partners. A Farkas relative (Younger brother, I believe) is the fund executive. This is good evidence that the Baystar and Emerson relationship had alternative means of communication, and unreturned phone calls from MSFT headquarters should be considered a convenient fiction.
Emerson and deputy Roberts also show up in July 2003 SEC documents as the signatory for the Microsoft investment in IMMR (Immersion) that had patent suits against Sony and MSFT. The MSFT stock investment in IMMR ended the Microsoft portion of the suit (for game controllers) while ensuring the suit against arch-rival Sony would continue. This "investment in a strategic lawsuit" has echoes in the Baystar Pipe deal occuring just months later. We can conclude that the IMMR and SCOX investments are implementations of a similar strategic idea. Sources:1 19312503051346/ddef14a.htm [sec.gov] 0 3E6DB103AF933A1575AC0A9659C8B63 [nytimes.com] t y=SEATTLE&st=WA&;last=EMerson&first=RICHARD [newsmeat.com]
http://news.com.com/2100-1022_3-5079594.html [com.com]
http://www.sec.gov/Archives/edgar/data/789019/000
http://query.nytimes.com/gst/fullpage.html?res=95
http://www.newsmeat.com/fec/bystate_detail.php?ci
Royal Bank of Canada (Score:4, Interesting)
They invested $30M in Baystar.
http://www.linuxinsider.com/story/33529.html [linuxinsider.com]
Re:Surprise (Score:5, Interesting)
Parent
Re:Surprise (Score:5, Insightful)
Well of course they are. Fear is the motivation for being a bully.
KFG
Parent
Re:Surprise (Score:5, Insightful)
You are thinking about two different models of corporate survival.
I find it easier to think of these things in terms of biological and evolutionary survival techniques.
One option in surviving as a corporate body in the economic ecosystem is to do the Darwinian thing by evolving to become the most efficient and effective at what your niche is. An example of this is the shark. One of the finest hunting species known. Similarly the wild cats.
Another alternative is various molds. They emit a gas which is highly toxic to all other forms of competing mold, thereby carving out a space within which there can be no competition because of the toxic nature of the air. Another exeptional example is Caulerpa taxifolia which is a seaweed growing across the mediterranean seafloor at the expense of all other life. The animals cannot eat is for it too is toxic.
As a corporation, one much protect it's ecosystem space or territory to remove competition. One method is to continually adapt in a highy evolutionary manner, trying to address all the environmental conditions that arise by responding to the liabilities and assets that present themselves. The other methodology is the lock down the environment through aggressive tactics to kill the opposition rather then out-hunt it by means of USPTO litigation, copyright litigation, litagation in general, and supporting litigation of others where it is advantageous. And then there's marketing. How many studies are there showing Windows is superiour to everything else? The price of Coke/Pepsi products is >50% marketing expenses.
Parent
Re: (Score:3, Insightful)
Re:Surprise (Score:4, Insightful)
Parent
It still makes me wonder (Score:5, Insightful)
1. The model capitalism was based on was #1 not #2. The ideal (19th century-style) capitalism idea is basically that of a market of commodities: all products are interchangeable, and a perfectly informed market decides which one offers the best bang/buck.
It's not just an ideological point of view. The role capitalism was supposed to serve was that of, well, basically the ultimate optimizer. Think, sort of, genetic algorithms. If the market needs X at all, there'll be tens or hundreds of competing entities trying to offer the best X at the best price possible. Each will make their own X1 variation at the best price they can manage, and the market will decide on the variant which fits the demand the best.
That was the strength of the western block over, say, the Soviet Union. That in the time the USSR planners decided always too late on what to produce and how much and in what way, the capitalist market could try a hundred ways and let the market choose the best one. That unless deciding "ok, we'll produce Volgas" which may be right or wrong, you can let a hundred people try a hundred different things, and end up with the Ford T1 model which was better and cheaper for most people.
Letting a corporation compete on how "toxic" they can be instead of competing on raw product merits is subverting that whole idea. It's, in fact, no better than the Soviet system. There too how "toxic" and subversive one could be (e.g., having high placed friends in the Party, or _being_ a party official who can send the opponents to Siberia) was most often what decided which model got produced and what got scrapped. We already know how well that went.
2. I wonder and worry about MS. (Or their managers, before someone accuses me of anthropomorphising... human managers.) Their whole history and practices shows that they're just not playing the same game we expect everyone else to play. And which, again, is the whole foundation of capitalism. Again and again, they seem more interested in just killing as many opponents as they can, as opposed to offering a better product or whatever.
Let me explain that better: it seems not even being toxic for survival reasons, but just being toxic for the hell of killing someone. Regardless of whether it's even a survival advantage or not. MS will even gladly take a huge loss (e.g., their XBox strategy) just to try to put someone else out of business. It's stuff that isn't even a survival advantage (making a loss never is), but just the sheer fun of killing someone just because they can.
Basically it's like watching a football game, where one of the players isn't even as much interested in playing the same game or even winning the game, as such, but just in kneecapping as many opponents as he can. Even winning (or losing) is merely a side-effect of killing or crippling everyone in the other team, rather than the goal and purpose of the exercise.
3. And I seriously worry about -- and am disgusted of -- the current US government's bending over to that kind of behaviour. Yes, that being toxic instead of competitive is an option for MS, is pretty obvious. But why tolerate such an entity? Not only it's condoning a major subversion of the very idea of capitalism, but... for _what_? MS is actually contributing very little to the US economy.
Microsoft is employing a grand total of 71,553 employees in 102 countries and regions as of July 2006 [wikipedia.org]. Total. Most of them actually support and sales/marketting and management people, and probably more than half off-shore anyway. Even at the scale of IT jobs, it's a spit in the bucket. Out of _millions_ of IT jobs, even after the exodus to India, we're talking maybe half a percent. At the scale of the economy, a helluva lot less.
So, while, yes, a government's priority should be keeping unemployment in check, MS is a spit in the bucket in that aspect. The effect of MS upon unemployment in the US is negligi
Parent
Re: (Score:3, Insightful)
Actually, they do. Corporations sometimes split parts of their business functions into new corporations to "focus on their core competencies" or something like that. Monopolies can also be split by courts. Then there's the model where a number of people working in a corporation leave to find a new one - the existence of the new corporation is a direct result of these people working together in the old corporation, so I
The paranoia of being on top. (Score:5, Insightful)
Well, yeah. I mean, they're standing atop the marketshare hill -- they have to be scared of everyone. There's no place to go but down; it's not a question of winning anymore, it's a question of hanging on to the top spot for as long as they can. History has shown that such situations don't last forever, but they're going to try and play it for all it's worth. (As anyone in their situation would.) To survive, Microsoft has to constantly be looking for the new competitor that's going to unseat them.
IBM, Kodak, Standard Oil, U.S. Steel -- all of these companies were once the untouchable masters of their respective domains, but all fell from grace eventually. Microsoft knows that it too shall fail eventually, but it's going to prolong it as best it can, and that means they have to be paranoid of everyone and everything that could possibly, at any point in the future, harm their position.
Parent
Actually... (Score:5, Interesting)
submitted as testimony/evidence in a Civil Trial- IBM is not wont, unlike MS and SCO to fabricate
things for the court (Both of the latter mentioned companies are VERY guilty of that!)...they don't
HAVE to...). A paper trail.
We see glimpses of it floating about on the Internet, if you know where to look. Not as much
of a libel or fiction as you'd like to believe.
Parent
Re: (Score:3, Insightful)
A: That someone isn't Microsoft, with all their lawyers.
B: You don't do it in documents which are very likely to end up being used as evidence in a court of law.
Re: (Score:3, Interesting)
Nevertheless, if you lie in court you can certainly be done for perjury.
Re:It's a shame ... (Score:5, Interesting)
Oh, and the documentary evidence that already corroborated this story.
Mike Anderer (the person behind SCO's ludicrous claims that 'spectral analysis' showed that there was lots of Unix code in Linux) was drunk late one night and fired off a stroppy, and semi-literate, email to his paymasters complaining that HE was the person who convinced Microsoft to tell Baystar to pump SCO full of cash, and that he deserved a bonus for it. This email ended up on Eric S Raymond's desk, back when our Eric was the hotline for disgruntled Microsofties with incriminating internal documents to share.
Read all about it here [catb.org]
Parent
Being under oath (Score:3, Informative)
Even though it is illegal people do commit perjury. In my case against Star Marketing Group [barbieslapp.com] they lied under oath in a declaraction. Mason Stedman claimed that it was the only officer in the company and since he was out of town, he did not receive the summons and complaint. If you look at company's web page [trafficgigolos.com] shows that that is a lie.
In another case, I had a spammer claim that there is no "affiliate program", both
Re:My firm only uses BSD. (Score:4, Informative)
Parent
You almost fell for it... (Score:4, Insightful)
B.
Parent
Re: (Score:3, Interesting)
Re: (Score:3, Funny)
Did the chair fly in the opposite direction ?
Re: (Score:3, Funny)
Re:There's Evidence, and then there's Clear Eviden (Score:5, Interesting)
Parent
Re: (Score:3, Funny)
Ian Hislop? Is that you?
Re: VC lawyers (Score:3, Interesting)
If you went, and didn't see the link to the pdf of IBM's memo, you are inc