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Once a prosperous, medium-sized and laid-back Northern California software company that produced successful and reliable vertical market UNIX operating systems for x86-based servers throughout the 1980s through the early 2000's, the Santa Cruz Operation (SCO) began its demise shortly after being acquired by Caldera, Inc., based out of Provo, Utah.Part of the Nay Noorda-backed family of companies known as the Canopy Group, the company re-named itself "The SCO Group" and soon began to find itself in a bit of an identity crisis. SCO Group's first incoming CEO and former CEO of Caldera Ransom Love wanted to merge Caldera and SCO's Linux and UNIX product lines, and create a best of breed OS.SCO had partnered with Intel, IBM and Sequent briefly during the mid-1990s on "Project Monterrey", an attempt to unify, merge and port the best aspects of the company's UNIXWare OS and IBM's AIX to the new Intel Itanium as well as IBM's POWER processor.With the rise in popularity of Linux and 64-bit x86 chips, interest in Itanium waned and the effort to market the completed IA-64 variant was scuttled.SCO's failure to market the IA-64 version of Monterey resulted in Ransom Love being pushed aside and succeeded by Darl Mcbride. With McBride at the helm of SCO, the company became entirely focused on litigation as opposed to product development.SCO not only sued IBM for alleged contributions of Monterey code to the Open Source Linux kernel, but also large customers, end-users and vendors of various Linux OSes, including Red Hat and Novell.This turned the company into a pariah not only among the legion of Open Source and Linux developers but SCO's own customers and the entire technology industry. The litigation debacle went on for years, chronicled in gory detail on sites such as Groklaw.SCO's sales of UNIX products went down the toilet, and was forced to lay off virtually all of its employees to focus entirely on its lawsuits.In 2007, SCO filed for Chapter 11 bankruptcy protection. In 2009, Darl Mcbride was fired. Early in 2011, UnXis Inc purchased SCO's remaining UNIX software assets.As of August 2001, SCO Group remained active only as a shell in order to continue its appeals processes on litigation against Novell regarding transfer of UNIX copyrights during its UNIXWare sale in 1995.This appeal found in favor of Novell (which is now a fully-owned subsidiary of Attachmate, Inc.) as exclusive holder of the UNIX copyrights on August 30, 2011 by the United States Court of Appeals for the Tenth Circuit.
Facing challenges from the growing Internet/Web and broadband industry in the late 1990s that was encroaching on its bread and butter dialup services and "walled garden" of content, on-line services provider America Online pursued a strategy of re-invention as a content and broadband giant by purchasing Time Warner in the year 2000 for a whopping $164 billion.The merger, executed by AOL CEO Steve Case and Time Warner CEO Gerald M Levin, turned out to be a total fiasco, with the new company unable to capitalize on Time Warner's strengths. Total subscribers of AOL went from an estimated 30 million at the height of its popularity to less than just over 5 million in 2007, with no significant quarterly growth since 2002.The company's market valuation has plunged significantly from a high of $240 billion to $1.66 billion as of August of 2011.In 2009, shortly after appointing a new CEO, Tim Armstrong, AOL announced it would spin off Time Warner into a separate public company, ending a fruitless eight year relationship.AOL has since gone on a New Media purchasing spree, including Patch, Techcrunch and The Huffington Post, which joins their other New Media properties such as Engdaget which it acquired as a result of its Weblogs, Inc. purchase in 2005.
Yahoo! grew rapidly during the early 1990's as one of the first search engine companies and went on a steady path of acquiring smaller Web companies and offering other Internet portal services such as financial news, web and image hosting (such as Flickr) but its failure to adapt to competitive forces, notably the rise of Google and FaceBook, caused the company's revenue to go into decline as it was unable to monetize these properties effectively.
Looking to expand its online presence, Microsoft made an unsolicited offer to purchase Yahoo! Inc. In February 2008 for approximately $47 billion. CEO and co-founder Jerry Yang, playing hard-to-get, formally rejected the bid, stating that it "substantially undervalued" the company and was not in the interest of shareholders.
Weeks of back-and-forth of highly publicized meetings between the two companies resulted in a standoff.
Shareholder and Yahoo! investor Carl Icahn attempted to patch things up in a last ditch attempt to get the Redmond-based software giant to come back to the table and attempted to force Yang out via a board room coup, but Microsoft CEO Steve Ballmer had enough and walked away completely exasperated, directing his company to create its own search engine and web properties under the Bing and Windows Live brands.
The company entered a round of heavy layoffs in 2008 following the failed merger attempt with Microsoft, and the market value of the company went into steep decline. As of September 2011, the market capitalization of Yahoo! Inc. has plunged to a low of $17.66 Billion, a far cry from Microsoft's original offer of $47 Billion.
Jerry Yang eventually found himself ousted and replaced with the very dynamic and outspoken CEO Carol Bartz in 2009, who ironically ended up entering a partnership agreement with Microsoft in a 10-year deal to use Bing as the search engine for Yahoo!.
Carol Bartz tried desperately to improve Yahoo's business, but was unable to turn the company around, whose initiatives had little support from her Board, and her tenure was marked by yet another round of heavy layoffs.
On September 6, 2011, the Yahoo CEO picked up her iPad and sent a broadcast email her employees, notifying them that the Chairman of the Board of Directors had just fired her via prepared company statement during an impersonal, cowardly phone call.
While Steve Ballmer and Microsoft's investors are probably quite happy in retrospect that they walked away, for Yahoo, it will always permanently scar the company for what might have been because Jerry Yang decided to play hard-to-get -- and it is questionable at this point the the company will ever recover.