According to this article, Steve Ballmer threatened to move more Microsoft jobs offshore if US tax rates increase. The article has how Microsoft tax dodges anyway by transferring their technology through Irish subsidiaries.
I know it is intended as a political threat, but moving jobs offshore isn't an issue. Many of the Bay area companies have great difficulty competing with the likes of Google for talented tech people and as a consequence they end up paying a lot for less talent. The result is that Bay area companies open up near shoring operations in cities like Phoenix, Portland, Denver, Salt Lake City and Texas.
I am sure Washington area software companies have a great deal of trouble competing with Microsoft for talented technologists and software engineers. Microsoft sending more of their labor overseas will only open up the market to Washington area software companies.
Another issue is that what companies can send overseas, they will, and in most cases have done already anyway. The arguments become if it is worthwhile or not, not arguments over whether to do it or not. So as a threat it is really not, though I am sure some nationalist politicians who don't have libertarian economic streaks in them will quiver in their boots at the threat.
ucblockhead : Speaking as someone who is both trying to hire, and also works extensively with very talented overseas groups: Balmer's an idiot.
If you are going overseas to save money, you've already failed. It's all about talent, and talent costs everywhere.
Idiots are cheap, though.
cam : When I was recruited for the phoenix office I naively assumed it was because rents and salaries were lower. That is true for the production facility, but not for the engineering group. The reason for recruiting engineers in phoenix was that they could get better talent in phoenix than in the bay area for the same price. Competition for software engineers in the bay area is such that they pay too much for too little talent. Phoenix doesn't have the same labor market pressures in tech as the bay area does.
Gar Talcott : Sorry...you're dead wrong. It comes down to companies surviving - remaining competitive in the global market. Obama has never managed a business in his life. He's a politician and will never understand how companies grow and exist.

Via cafeconleche a quote from Robert Cringley, "Bill Gates used to worry about Microsoft losing its monopoly overnight because of a technical mistake. We all laughed. We laughed because Microsoft had such financial and sales clout and had the executive suite of nearly every customer company so snowed that they seemed unassailable. But on some level Gates was correct and we've seen that proved by Google."
Which is a pretty lazy analogy. Microsoft still has its operating system monopoly. For all of Apple's success it has made very little inroads into the operating system market. Firefox is an outstanding product but it is no more than 20% of traffic on most sites.
Microsoft is still an operating system and office productivity behemoth. The only thing Google and Microsoft have in common is that they are big tech companies; but they are not in the same market. Google is an advertising reseller, while Microsoft actually sells bundled code into products. They are two different markets.
Microsoft has been trying to get into the search market with Yahoo!, but even there, it is more like Microsoft is buying Time-Warner as Yahoo! is a massive media company, not a search one.
Because Google got big so quickly it has gathered all sorts of mythical attributes in modern media. It was an innovative company, it re-created what we expect from search engines, but also managed to sustain that search functionality through a well executive advertising business model.
Then again mythos sells, in the same way that sensationalism and drama does. Lazy analogies will consistently be the domain of the writer who has to appeal to a mass audience.
The Senate Standing Committee for Communications is
currently reviewing [pdf]
the Communications Legislation Amendment 2007. Microsoft had an interesting submission.
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