The Problem with Rumors…

…is that they’re often fact-deficient.

The rumor that’s been making the rounds over the past 24-hoursis speculation that Microsoft has bought, or is buying, Opera (themakers of the excellent Opera webbrowser). The source of this multi-hundred-million-dollarrumor, involving two publicly-traded companies, is one small,random, tech “ezine”. Nonetheless it’s been repeated onSlashdot, Digg, along with many other sites and blogs.

The indirect birthplace of the rumor – perhaps the source of theplot for someone’s fiction – was JohnC. Dvorak’s commentary yesterday that Microsoft should buyOpera, given that they’re letting the IE browser rust on the Mac.Opera, Dvorak claimed, would provide Microsoft with across-platform solution.

The problem with Dvorak’s hypothesis, among many otherlogic gaps, is that Microsoft doesn’t want across-platform solution. Internet Explorer on the Mac wasn’tabandoned because it was too difficult to maintain, and itcertainly wasn’t that Microsoft couldn’t keep up. Instead, it wasstrategically abandoned because Microsoft couldn’t rationalizespending the time and effort to create a browser for someone else’splatform. It also brought Microsoft under additional scrutiny: It’sone thing for the monopoly operating system vendor to use some ofthose profits to enable their own platform, but it’s quite anotherto provide a free browser to edge out competitors on otherplatforms as well. Internet Explorer on the Mac underminedMicrosoft’s bundling proposition as well (the whole “it’s apart of the operating system…that you can also run on otheroperating systems…“).

Ultimately this rumor is so void of any logical foundation thatit is an indictment of the group-think sites that it has gotten theattention that it has (though it got the originator website exactlywhat they wanted, which is a lot of attention). Once again I’msetting myself upfor a hearty serving of egg-on-the-face, boldly proclaiming that itis very unlikely that this story is true, but that’sexactly what I’m saying. At least the Google-buying-Opera nonsenseof a month or so ago could be mentally rationalized to some degree,but Microsoft-buying-Opera is just over the top ridiculous.

On top of all of that, there are some legalities that arecertainly going to start biting small internet papers and blogsthat perpetrate this sort of rumor mongering: Making falsestatements about publicly traded companies in ways that can impacttheir valuations might seem like a harmless, fun way of boostingthe hits, but there are legal restrictions on that sort of fiction.I’m not saying with certainty that this particular story is untrue,but it seems highly likely to be the case.

UPDATE: While scanning the discussion boards, I’ve noticed thata commontechnique to keep the hype alive is to focus on themobile market as Opera’s killer valuation: Opera has amicro-browser that runs on cellphones, therefore that legitimizesthe purported buyout (as only the few true believers would thinkthat Microsoft replacing IE7 with Opera is even remotelypossible).

There are several problems with this.

  • Microsoft already competes in the mobile space with thePocketPC OS, and a mobile version of Internet Explorer
  • Even then, there is very little money to be made having yourbrowser on a cell phone – this isn’t IE versus Netscape of 1997.This is 2005, and the primary concern is to be the site that themicro-browser goes to, not the browser itself. Inthe case of cell-phones, there is little chance that the providerswould allow Microsoft to direct it to a Microsoft property, so eventhat minor advantage is lost
  • Many of Opera’s customers (who are the hardwarevendors – not Joe on the street) for the mobile browser areMicrosoft competitors. They would dump it in a heartbeat if it wasacquired by Microsoft

The mobile angle does nothing to rationalize the scenario.