> Complete diversion: One of Corel's favourite tricks in the past (though not now, I think -- everything changed after they were sold) was to overfill the sales channel in first quarter. Basically they would "sell" the software to dealers, but would provide "refunds" for software that wasn't sold by the end of 4th quarter. So 1st quarter was always massively positive, while they were always massively (and somehow unexpectedly) in the red by 4th quarter.
More or less OT, but maybe interesting: This was the strategy that killed West End Games (once one of the biggest publishers of pen & paper games). They would print as many books as they could and send them out to shops, but the shops had the option of sending them back when they couldn't sell them. Then in 1998 for some reason almost all of the books came back and WEG was bankrupt. Seems it worked far better for Corel. Not sure if this is good or bad.
Corel was actually very close to bankruptcy at that point. I think they were down to $2M and Microsoft bailed them out by buying a new round of preferred shares. If I remember correctly it was $130M. The CEO of Corel at the time got quite cosy with MS and decided that they should be friends -- with Adobe being the "enemy". We seriously had company wide meetings where they repeated "Kill Adobe" over and over again.
The strategy that MS suggested Corel follow was to invest the $130M in acquiring companies (which is how they ended up with Paint). Now here's the fun part: MS's preferred shares were non-voting, but they had a veto on acquisitions ("Just so that we can protect our investment. Trust us, we'll never use it! We're the ones telling you to acquire companies, aren't we?"). MS, then turned around and sold their shares to a VC company called Vector (part owned by Paul Allen).
After buying the shares, Vector said, "We're putting a veto on all of those acquisitions. Oh... the penalty clauses will make you bankrupt? So sad for you... We're happy to buy your entire company and turn it private. If you don't agree, then I guess you are out of business."
So Vector managed to buy up Corel for (IIRC) somewhere around $110M. At the time Corel still had something like $90M in the bank, so Vector paid $20M plus the $13 million form their initial purchase from MS. They managed to do the acquisitions and then resell them. After a year, they made a new public offering of shares for 25% of the company for somewhere around $40M (these numbers may be wrong as they are coming from my aging memory, but they are illustrative of what went down if not accurate) -- giving them a pretty awesome ROI in just one year.
All of the senior Corel executives (including the CEO and VPs) somehow managed to land jobs as "senior product managers" at MS. Some of them seemed to turn down their lucrative parachutes from Corel to accept the job, so... I guess they were given handsome signing bonuses...
It shouldn't surprise me, but once you get above a certain level it stops being about making a product or doing a service and becomes all about making money. The companies are just a vehicle for that pursuit and in a lot of ways I think the "power people" don't care that much if the company survives or dies. They just care where the money falls.
More or less OT, but maybe interesting: This was the strategy that killed West End Games (once one of the biggest publishers of pen & paper games). They would print as many books as they could and send them out to shops, but the shops had the option of sending them back when they couldn't sell them. Then in 1998 for some reason almost all of the books came back and WEG was bankrupt. Seems it worked far better for Corel. Not sure if this is good or bad.