While it had long been rumored, an executive from investment firm BayStar admitted in a sworn statement recently that Microsoft more or less guaranteed their surprise investment in SCO -- which helped SCO continue its questionable case against IBM (and Linux in general). Microsoft quickly responded that no such agreement existed, though they don't deny that such ideas were discussed. Some are saying that too much is being made of this, but at the same time Forbes has done a nice job comparing the "then" and "now" statements from BayStar's Larry Goldfarb. Then? He talks about how they had been following SCO for a long time: "We've been looking for ways to take part in Unix and Linux. We loved the history of what SCO had going back to [incarnation as] Caldera." Now? He admits he didn't really know anything about the company: "Sometime in 2003, I was approached by Richard Emerson [Microsoft's senior vice president for corporate development and strategy] about investing in SCO, a company about which I knew little or nothing at the time." Then? "It wasn't a bet on the lawsuit for us. In and of itself, if you look at the cash flow and balance sheet, this looks like a good investment. We do a lot of due diligence." Now? "In the course of my research about SCO, I became concerned that SCO might be merely a litigation company. As a result, Mr. Emerson and I discussed a variety of investment structures wherein Microsoft would 'backstop,' or guarantee in some way, BayStar's investment. ... However, Microsoft would not put anything in writing on this point." Of course, it should be noted that BayStar eventually changed its mind and wanted its money back, which could impact exactly how certain discussions were remembered. Either way, it certainly paints a very different picture of what happened.
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