Comments

• Andrew Macabe

  2009-07-14 15:59:12

  On software: Packaging and storing windows on store shelves is really a losing proposition in itself. To microsoft it's more an investment by establishing a commercial/consumer value on products (windows, msoffice, etc.) no one in their right frame of mind would actually pay or even copy. Given that the "value" for the product is therefore established, the campaigning for profit begins by snaring the various governmental depts; education, military, police, charities, etc. How many packaged, boxed products does a corporation get when it pays a site license for a windows os?
  
  There is nothing of any value that the USA can export except its GNP, which is its natural resources (natural gas, coal, etc. - Welcome to the order of 3rd world countries, America), so, it's concentrating on Intellectual Property licensing (money from nothing-patents on ideas and concepts) and pushing American corporate mentality (ACTA, CompTIA, BSA, etc.) on to other countries.

• Roy Schestowitz

  2009-07-14 16:09:05

  Both ACTA and ACT are pushing American corporate mentality, but I think you meant "ACT" (Microsoft front). ACTA is the initiative to transform the world into a global intellectual monopoles police.

• Andrew Macabe

  2009-07-14 16:14:30

  The Jonathan Zuck group.

• Roy Schestowitz

  2009-07-14 18:09:17

  Which used to be called ATL.

• Andrew Macabe

  2009-07-14 18:16:02

  Thanks, I always screw up acronyms.

• Jose_X

  2009-07-14 20:20:12

  If the B&M Foundry donates in one year $100,000,000 of MS products/services (that would be less than 1% of the money the charity has), that number comes out as Microsoft revenues, with a high percentage of that as earnings. MSFT is priced at at least 10 times earnings. This means that 100 million investment helped MSFT gain or maintain some 1 billion dollars in market cap. Since Gates has MSFT shares he sells, this means by investing 100 million from his left pocket, he made 10 times that into his right pocket.
  
  Well, not exactly because he only profits from a small part of MSFT's total market cap.
  
  Can he thus turn 60 billion into 600 billion market cap? Well, yes in a sense, if he went all out.. at least for a year he could pull that off and if the market did not realize what was going on. Of course, he owns a fraction of MSFT, so he would not want to use his charity to subsidize all other MSFT investors. However, if he got many to contribute to B&M Foundry, then he would be using their money.
  
  Also, you can apply this to even more spectacular P/E ratios if you do it with small companies, eg, with small "high-growth" pharm companies owned by Bill.
  
  So if Bill owns all of some small company, and he feeds that company 100 million over 5 years so that when the company goes public at the end of the five years, it made 50 million in that last year, then the IPO might result in a P/E of 100 or more. 50 million times 100 is 5 billion. Gates would likely own at least 30 percent at the time of the IPO (I'm guessing this figure). That would mean that his B&M Foundry's 100 million investment would have netted Bill over 1 billion dollars at least if he were able to cash in at the IPO price. [Yes, I excluded taxes in this simplified analysis.]
  
  In practice he can use the B&M Foundry not to entirely support such a pyramid scheme but to help fuel it and to give this private businesses competitive advantages over everyone else. Throw in pharm patents and you are looking at monopolies in the making. Repeat for some other industries. And to think, all of these would be largely controlled by a small number of people and be supporting each other.
  
  Bill didn't invent this, but I have a hunch he will try to exploit it to the max.
  
  Yes, there are laws, but how many loopholes exist? Point is Bill is likely leveraging this significantly if not nearly as much as might be suggested by the above simplified model.

• Roy Schestowitz

  2009-07-14 20:28:42

  This is not new. Some distinguished medical professionals publicly accused Gates of monopolising in their field using a "charity" as a vehicle. You can find articles about it.

• Jose_X

  2009-07-14 20:33:16

  I had not heard of actual competitors complaining. I would like to read up on this.

• Jose_X

  2009-07-14 20:42:51

  I would like to read up on this...and if I had heard (probably here), I do not recall anything like what you mentioned.
  
  The basis for this is because you have markets pricing companies at many times earnings. Thus you can feed some of your gains from selling at the high price of the business back into revenues.
  
  If the company has a high profit margin, then the revenues mostly become earnings.
  
  This, thus, finishes out the cycle, as these extra earnings get multiplied many-fold to lead to even greater pricing of the company.
  
  Of course, those that have lots of influence over the pricing of companies (ie, those with savvy and access that lead them to buy low) know what is going on and won't pay a high price, but they can exploit the ignorance among most of the investment public.
  
  And you don't have to go all out with this technique (or exclusively). The point is that the B&M Foundry is helping to distort markets. This hurts consumers and many others.
  
  It also shows that patent monopolies are being exploited to lead to or to help preserve larger monopolies.

• Roy Schestowitz

  2009-07-14 20:47:58

  Here is the latest article I am aware of:
  
  http://www.hindu.com/2009/05/10/stories/2009051055151000.htm
  
  Journal critique on Bill & Melinda Gates Foundation grant pattern
  
  

  New Delhi: The Bill and Melinda Gates Foundation’s pattern of funding in the form of grants for global health programmes and projects has been criticised in a research paper in The Lancet.

  
  
  Older:
  
  http://www.nytimes.com/2008/02/16/science/16malaria.html
  
  Gates Foundation’s Influence Criticized
  
  

  The chief of malaria for the World Health Organization has complained that the growing dominance of malaria research by the Bill and Melinda Gates Foundation risks stifling a diversity of views among scientists and wiping out the world health agency’s policy-making function.
  
  In a memorandum, the malaria chief, Dr. Arata Kochi, complained to his boss, Dr. Margaret Chan, the director general of the W.H.O., that the foundation’s money, while crucial, could have “far-reaching, largely unintended consequences.”
  
  Many of the world’s leading malaria scientists are now “locked up in a ‘cartel’ with their own research funding being linked to those of others within the group,” Dr. Kochi wrote. Because “each has a vested interest to safeguard the work of the others,” he wrote, getting independent reviews of research proposals “is becoming increasingly difficult.”