Why Wall Street didn’t believe Steve Ballmer (and what he can do about it)

You might have missed that Microsoft's stock has been in a freefall lately.

My friends have been asking me "why doesn't Wall Street believe Steve Ballmer?"

That's an easy one. Cause he didn't convince the grass roots influence networks first. Why have Google and Apple done so well in the last three years? Cause the grassroots loves them. That's the powerroot of the industry. Ideas here don't come from the big influencers and move down. No, they start on the street and move up. Anyone miss how Google got big? Not by throwing a press conference.

Ballmer should not listen to his PR team and instead should live the blogging way.

Huh?

Did you miss that I turned into an international news story that has gotten more attention than everything Microsoft announced at its big TechED conference this week?

How did I do that?

I talked with the grassroots FIRST. Against the advice, by the way, of a lot of PR people (they wanted me to break the news to Walt Mossberg or someone "important" first — they thought that's how I was going to get the biggest story going).

They all are wrong. I almost bought into it too. In fact, I did. On Saturday I talked with maybe 20 people and said "can you wait until Tuesday to talk about it?" I wanted to give the story to the Wall Street Journal too. Not to mention I wanted to tell my coworkers before the story hit. I didn't get that chance and I'm lucky, in hindsight, that I didn't. Because the story started on the grassroots first it got far far bigger than if I broke it on a big newspaper.

It's a lesson I'll never forget again.

Journalists need sources for stories and they need to convince editors that stories are important to pay attention to.

What was going on this weekend? Journalists were emailing TechMeme around to their editors and saying "something important is going on here." How do I know that? Cause when the journalists were calling that's what they told me. They saw a blog mob and that helped them sell the story.

Analysts, on the other hand, also watch what grass roots are saying. The wisdom of crowds. It drives a lot of buying decisions. Why is Google's stock higher than Yahoo's? (Yahoo does pretty much the same thing as Google and has more users, after all). Because the influential users all use Google. When I ask my audiences which email or search system they use they predominantly answer Google. That turns into hype. Hype sells advertising (advertisers want to reach the influential users, not the clueless ones). That turns into profits and profits turns into stock price.

So, why is Microsoft stock price in freefall? Cause Steve Ballmer didn't come to the grassroots and convince him that Microsoft's business strategy makes sense. We still haven't explained, for instance, to the grassroots why Windows Vista matters. Or why spending $2 billion on server farms will make any sense to them. Or why the Xbox is going to be profitable.
What would I do? I would show up unannounced at three conferences. BloggerCon, Gnomedex, and BlogHer. No PR team there to spin. No lawyers. No video crew. And focus on answering those three things. Windows Vista. Investments in server farms. Xbox profitability.

Just show up and let people on the grassroots get to know you and answer those questions over and over and over again (on Sunday I did about 40 interviews with everyone who was at VLoggerCon, no matter how small the audience they had). Answer their questions. Even the harshest stupidest Slashdot style questions.

Do that and you'll see the stock price go back up.

Oh, and by the way, I'm not selling my Microsoft stock. Why? Cause I already know the answers to those three questions and I'm quite confident in the future of Microsoft. It's just that I'm not the CEO of Microsoft.

Show up at Gnomedex, answer those three questions to anyone who'll ask, and you'll see the power of the Grassroots.

I learned the power on Sunday. Thanks to VLoggerCon for teaching me that. Oh, and I'm being talked about on GeekBrief.TV today (Cali was launching a campaign to replace Ballmer with me — hey, Steve, I'd give her your first interview!)

146 thoughts on “Why Wall Street didn’t believe Steve Ballmer (and what he can do about it)

  1. @42. And not many “normal people” know or care about the NPR art critic. I say take a random poll walking down Broadway in Times Square to get a true picture.

    Anyway, you are completely off base regarding my “thninking”. I don’t pay attention to MSM, for the very reason how your “non-story” played out there. My point is MSM is swayed more by ratings and page hits than they are with doing any actual news. Same with a lot of tech bloggers–they seem only to care about hits and where they rank.

    If we relied completely on MSM for our stories Dan Rather would still have a job. Thankfully it was some actual intelligent bloggers that cared more about a story than they did about getting linked to that allowed them to get to the bottom of Dan Rather’s “story”. So, I’m not saying bloggers can’t add value and can’t fill a void. It just seems the political bloggers are more insightful than the “a list” tech bloggers. And the tech reporters at on-line MSM outlets. I guess I should have qualified that. It’s not that ALL bloggers wouldn’t know a news story if it bit them in the ass, just a considerable amount of tech bloggers.

  2. Then again, why run Windows on the MacBook? It’s like taking a gorgeous supermodel and putting the face of one’s grandmother on her. :)

  3. Then again, why run Windows on the MacBook? It’s like taking a gorgeous supermodel and putting the face of one’s grandmother on her. :)

  4. Robert: “I’ll tell you, though, I’m gonna probably buy an Apple machine to run Vista on. But, most people won’t. Why not? Cause their machines are way more expensive than those that run only the Windows operating system.”

    Really? Have you done price comnparisons lately? I think Apple has closed the gap quite a lot with the MacBook. Have a look: http://www.codinghorror.com/blog/archives/000591.html

    Of course you’ll have to pay for your copy of Windows, since it won’t come with the MacBook. :)

  5. Robert: “I’ll tell you, though, I’m gonna probably buy an Apple machine to run Vista on. But, most people won’t. Why not? Cause their machines are way more expensive than those that run only the Windows operating system.”

    Really? Have you done price comnparisons lately? I think Apple has closed the gap quite a lot with the MacBook. Have a look: http://www.codinghorror.com/blog/archives/000591.html

    Of course you’ll have to pay for your copy of Windows, since it won’t come with the MacBook. :)

  6. While ‘influentials’ are good for general goodwill, good press and a few deployment wins here and there, the stock price is much much more complex, as institutional and indiviual investor confidence in future directions, current management, deliverable road maps, coupled with internal morale and the basic financial fundamentals all play a big part, as well as clear communication with the Street itself. Which is always a Microsoft problem, as recently Ballmer flat-footed in April (one of the worst performances in his career) just waltzing in without a clear plan yelling “spend, spend, spend”…I mean predictable reaction, and predictable Microsoft post-whine fest with the usual Microsoft ‘post-adjustments’. Always gives you the feel they are never straight up the first round, as always a new story. But I sorta saw this all coming back in the frenzied Longhorn hype era, and no longer have a position, shifted my Microsofts back to CAT.

    Now as far as you leaving, and the MSM play, such just gives an impression of rats leaving the sinking ship (and that’s straight from the horses mouth from 4 MSM’ers). Falling stock, bolting employees…same plot, same storyline.

    But even taking into account that ‘very simplistic and naive’ grassroots view, if such be the case, Microsoft will never win, as they COMMAND and CONTROL the grassroots, forcing them into MVP and other entitlement fan-boyish programs, blacklisting them if they ever go out to pasture, and not ever seeing or rewarding the hidden grassroots that have real impact, just all huddling by the ‘Early Adopter’ and Fan Site Webmaster campfire.

  7. While ‘influentials’ are good for general goodwill, good press and a few deployment wins here and there, the stock price is much much more complex, as institutional and indiviual investor confidence in future directions, current management, deliverable road maps, coupled with internal morale and the basic financial fundamentals all play a big part, as well as clear communication with the Street itself. Which is always a Microsoft problem, as recently Ballmer flat-footed in April (one of the worst performances in his career) just waltzing in without a clear plan yelling “spend, spend, spend”…I mean predictable reaction, and predictable Microsoft post-whine fest with the usual Microsoft ‘post-adjustments’. Always gives you the feel they are never straight up the first round, as always a new story. But I sorta saw this all coming back in the frenzied Longhorn hype era, and no longer have a position, shifted my Microsofts back to CAT.

    Now as far as you leaving, and the MSM play, such just gives an impression of rats leaving the sinking ship (and that’s straight from the horses mouth from 4 MSM’ers). Falling stock, bolting employees…same plot, same storyline.

    But even taking into account that ‘very simplistic and naive’ grassroots view, if such be the case, Microsoft will never win, as they COMMAND and CONTROL the grassroots, forcing them into MVP and other entitlement fan-boyish programs, blacklisting them if they ever go out to pasture, and not ever seeing or rewarding the hidden grassroots that have real impact, just all huddling by the ‘Early Adopter’ and Fan Site Webmaster campfire.

  8. Robert,
    Why your premise may sound nice, it isn’t really that accurrate. First off, the stock market as a whole hasn’t been performing all that well for the past few years (blaim it on the War, high oil prices, the Hurricane, high deficits, etc.). MS has become a mature stock that reflects more the overall market movement instead of the up-and-comer. You can’t compare a mature stock’s performance to Google. Google is still on its up-curve. The real question will be if Google will have anywhere near as long of run as MS had.

    The second reason for poor performance is it is a lot harder to show performance when you are so big and hold a monopoly (not necessarily in a bad sense) in the OS and Office Suite markets. These markets are stable and the main income stream is tied to computer sales (i.e., most upgrade/buy new when they replace their computers).

    Until MS builds more stable, new revenue streams they will not be the “darling” stock they were 5-10/15 years ago. In other words, they are at a different point of history than a Google.

    As far as Apple, they are more rebounding than becoming a new growing stock. Once they finish their Intel conversions, released another version of OSX that will have features that Vista only dreams about, and finish the flash conversion of iPods, their revenue streams growth will flatten out and even possibly decline. Apple’s problem is they are production capacity limited. As long as they don’t release OSX to other manufacterurs (like Dell), they will limit their own growth potentional. They have to get more production or they will never grow as much as the PC business is growing.

  9. Robert,
    Why your premise may sound nice, it isn’t really that accurrate. First off, the stock market as a whole hasn’t been performing all that well for the past few years (blaim it on the War, high oil prices, the Hurricane, high deficits, etc.). MS has become a mature stock that reflects more the overall market movement instead of the up-and-comer. You can’t compare a mature stock’s performance to Google. Google is still on its up-curve. The real question will be if Google will have anywhere near as long of run as MS had.

    The second reason for poor performance is it is a lot harder to show performance when you are so big and hold a monopoly (not necessarily in a bad sense) in the OS and Office Suite markets. These markets are stable and the main income stream is tied to computer sales (i.e., most upgrade/buy new when they replace their computers).

    Until MS builds more stable, new revenue streams they will not be the “darling” stock they were 5-10/15 years ago. In other words, they are at a different point of history than a Google.

    As far as Apple, they are more rebounding than becoming a new growing stock. Once they finish their Intel conversions, released another version of OSX that will have features that Vista only dreams about, and finish the flash conversion of iPods, their revenue streams growth will flatten out and even possibly decline. Apple’s problem is they are production capacity limited. As long as they don’t release OSX to other manufacterurs (like Dell), they will limit their own growth potentional. They have to get more production or they will never grow as much as the PC business is growing.

  10. Wall Street doesn’t believe in Ballmer because he doesn’t deliver….. we give you 1 inch to hang yourself …. and most do…… delay , delay , delay …. and the joe-joe the monkey boy jumping around routine is funny , but doesn’t help the company make any more $$$$

  11. Wall Street doesn’t believe in Ballmer because he doesn’t deliver….. we give you 1 inch to hang yourself …. and most do…… delay , delay , delay …. and the joe-joe the monkey boy jumping around routine is funny , but doesn’t help the company make any more $$$$

  12. By the way Robert,

    I have been stoked and impressed with the blogging efforts at TechEd. Seems like every time I refresh my feed reader it’s got another 15-20 blog entries covering all facets of the week.

    Jason

  13. By the way Robert,

    I have been stoked and impressed with the blogging efforts at TechEd. Seems like every time I refresh my feed reader it’s got another 15-20 blog entries covering all facets of the week.

    Jason

  14. >Both Bill and Ozzie seem far more approachable than Steve any day.

    And why is that? Methinks cause Steve doesn’t come out to the “little guy” conferences and press the flesh. What do we do to people like that? We tend to try to tear them down to our level. Not good.

    Thanks for not unsubscribing, you should start your own blog, though, so I can subscribe to you!

  15. >Both Bill and Ozzie seem far more approachable than Steve any day.

    And why is that? Methinks cause Steve doesn’t come out to the “little guy” conferences and press the flesh. What do we do to people like that? We tend to try to tear them down to our level. Not good.

    Thanks for not unsubscribing, you should start your own blog, though, so I can subscribe to you!

  16. Wow, awesome post. And yes, I have been asking myself why I want Vista and Office 2007. I saw two live webcasts on Exchange 2007 and I get it, love it and want THAT.

    I wasn’t able to get to Boston and have been scouring the news for the reports out of Boston and seriously, I can’t seem to get much. I would rather meet Bill Gates or Ozzie though than Steve Ballmer. I want to talk to technical gurus at conferences, not another executive. Both Bill and Ozzie seem far more approachable than Steve any day.

    And you know what? I appreciate that you DO take the time to get to know those people that don’t seem interesting at first glance and then blog about them. That is why I WON’T be unsubscribing any time first. You might even convince me that I need to hear a podcast (haven’t heard one yet, hey, haven’t even purchased an IPOD).

  17. Wow, awesome post. And yes, I have been asking myself why I want Vista and Office 2007. I saw two live webcasts on Exchange 2007 and I get it, love it and want THAT.

    I wasn’t able to get to Boston and have been scouring the news for the reports out of Boston and seriously, I can’t seem to get much. I would rather meet Bill Gates or Ozzie though than Steve Ballmer. I want to talk to technical gurus at conferences, not another executive. Both Bill and Ozzie seem far more approachable than Steve any day.

    And you know what? I appreciate that you DO take the time to get to know those people that don’t seem interesting at first glance and then blog about them. That is why I WON’T be unsubscribing any time first. You might even convince me that I need to hear a podcast (haven’t heard one yet, hey, haven’t even purchased an IPOD).

  18. Hah! I looked David Madison up in the corporate system here and HE IS a marketer at Microsoft!

    Wild.

    Well, DMAD, the company is in your hands now. I hope you make the stock go up cause I still own some.

  19. Hah! I looked David Madison up in the corporate system here and HE IS a marketer at Microsoft!

    Wild.

    Well, DMAD, the company is in your hands now. I hope you make the stock go up cause I still own some.

  20. Robert,

    I must admit that I didn’t initially get that you were referring to the stock’s movement post the analyst visit. I think we WHOLEHEARTEDLY agree that Ballmer’s “answers” clearly didn’t resonate in his trips to Boston and New York. I just think we disagree on the remedy.

    Personally I don’t think Ballmer is the guy that should be showing up at blogging, tech and other social media events. I think a host of Microsoft’s 3,000+ bloggers should be…I think Ray Ozzie should be…I think GASP Bill Gates should be (he is more a visionary than an operations guy now, right?). Ballmer is an operator, he’s a bulldog, and he doesn’t seem to adjust to his audience well…that’s a real problem when you’re THE conduit to a great many of your constituencies.

  21. Robert,

    I must admit that I didn’t initially get that you were referring to the stock’s movement post the analyst visit. I think we WHOLEHEARTEDLY agree that Ballmer’s “answers” clearly didn’t resonate in his trips to Boston and New York. I just think we disagree on the remedy.

    Personally I don’t think Ballmer is the guy that should be showing up at blogging, tech and other social media events. I think a host of Microsoft’s 3,000+ bloggers should be…I think Ray Ozzie should be…I think GASP Bill Gates should be (he is more a visionary than an operations guy now, right?). Ballmer is an operator, he’s a bulldog, and he doesn’t seem to adjust to his audience well…that’s a real problem when you’re THE conduit to a great many of your constituencies.

  22. Dmad: the art critic on NPR knew who I was, so there. Heheh.

    Anyway, let’s just say we disagree. You sound a lot like a Microsoft marketer, though. I wish you well with that kind of strategy of paying attention only to the big media and the “really important” people.

    That’s what Microsoft does and look where our stock is headed. Maybe going in a new direction would be a good thing?

  23. Dmad: the art critic on NPR knew who I was, so there. Heheh.

    Anyway, let’s just say we disagree. You sound a lot like a Microsoft marketer, though. I wish you well with that kind of strategy of paying attention only to the big media and the “really important” people.

    That’s what Microsoft does and look where our stock is headed. Maybe going in a new direction would be a good thing?

  24. Self-important: you’re right. But, see, you keep thinking I care that my 15 minutes are coming to an end.

    CC: if you think Vista is just an Apple copy you aren’t looking hard enough. I’ll tell you, though, I’m gonna probably buy an Apple machine to run Vista on. But, most people won’t. Why not? Cause their machines are way more expensive than those that run only the Windows operating system. I am looking at buying a Dual-Core laptop and there’s dozens of choices on the Windows side, but only two on the Mac side and the Macs are more expensive and have less powerful choices available.

    But, why is Vista important? For the same reasons I went to PodTech.net: audio and video are dramatically better on it.

  25. Self-important: you’re right. But, see, you keep thinking I care that my 15 minutes are coming to an end.

    CC: if you think Vista is just an Apple copy you aren’t looking hard enough. I’ll tell you, though, I’m gonna probably buy an Apple machine to run Vista on. But, most people won’t. Why not? Cause their machines are way more expensive than those that run only the Windows operating system. I am looking at buying a Dual-Core laptop and there’s dozens of choices on the Windows side, but only two on the Mac side and the Macs are more expensive and have less powerful choices available.

    But, why is Vista important? For the same reasons I went to PodTech.net: audio and video are dramatically better on it.

  26. @32. I’m not really arguing that. I think we both agree that there was “heat”. I’m arguing the lack of analysis on the part of the professional journalists. It was no more a story than (insert movie star’s name here) having a baby or getting a divorce. Interesting, but not really a story with any substance. To sum it, it was: “Low-level MS employee that chose to blog about Microsoft and became a cult hero in the blogging community is leaving Microsoft for obscure podcasting start up”. Not really something moves the MS market. And outside of geeky bloggers I’ve not come across anyone that’s even heard of this “story”.

  27. @32. I’m not really arguing that. I think we both agree that there was “heat”. I’m arguing the lack of analysis on the part of the professional journalists. It was no more a story than (insert movie star’s name here) having a baby or getting a divorce. Interesting, but not really a story with any substance. To sum it, it was: “Low-level MS employee that chose to blog about Microsoft and became a cult hero in the blogging community is leaving Microsoft for obscure podcasting start up”. Not really something moves the MS market. And outside of geeky bloggers I’ve not come across anyone that’s even heard of this “story”.

  28. Robert, I agree that communication was the problem, but not necessarily with the grassroots.

    I wrote a blog about this communications blunder a few weeks ago. Here is an excerpt;

    Microsoft management did a poor job of communicating to Wall Street, during the April 06 earnings conference call, that next year we plan to spend about $2 Billion more than analysts expected. The stock price dropped more than 20% wiping out $55 Billion in market value. Microsoft management was incredulous. How could Wall Street react in such an immature way? How could a couple billion in additional spending wipe out $55B of market value? It is all about communication…and how you clean up your messes.

    Microsoft should have communicated a clear plan, ahead of the earnings call, for how we planned to “invest” the money in new business opportunities, and the expected time frame to see results. Instead, it was suggested to analysts during the conference call that they should add $1.5B to $2B to their spending estimates for next year. It was only later, after the severe stock market reaction, that Microsoft “scrubbed the numbers” and clarified that it would be more like $1B, and gave clearer guidance on where the money would be invested. Too late. The market has already decided that given all the delays with “Longhorn/Vista” that the payoff for this $1B investment could be much longer than expected.

    How could $1B in investment cause a $55B reaction? It is actually a rational response. The initial claim was additional spending of $1.5B to $2B. Wall Street applies a P/E multiple to earnings. Well it works both ways, that P/E also gets applied to spending which results in lower earnings. The P/E was around 21 at the time, so 21 times $2B is $42B of market value. The remaining $13B of lost market value is probably over reaction that may disappear over time.

    If interested you can read the whole post here http://dondodge.typepad.com/the_next_big_thing/2006/05/there_will_be_m.html

  29. Robert, I agree that communication was the problem, but not necessarily with the grassroots.

    I wrote a blog about this communications blunder a few weeks ago. Here is an excerpt;

    Microsoft management did a poor job of communicating to Wall Street, during the April 06 earnings conference call, that next year we plan to spend about $2 Billion more than analysts expected. The stock price dropped more than 20% wiping out $55 Billion in market value. Microsoft management was incredulous. How could Wall Street react in such an immature way? How could a couple billion in additional spending wipe out $55B of market value? It is all about communication…and how you clean up your messes.

    Microsoft should have communicated a clear plan, ahead of the earnings call, for how we planned to “invest” the money in new business opportunities, and the expected time frame to see results. Instead, it was suggested to analysts during the conference call that they should add $1.5B to $2B to their spending estimates for next year. It was only later, after the severe stock market reaction, that Microsoft “scrubbed the numbers” and clarified that it would be more like $1B, and gave clearer guidance on where the money would be invested. Too late. The market has already decided that given all the delays with “Longhorn/Vista” that the payoff for this $1B investment could be much longer than expected.

    How could $1B in investment cause a $55B reaction? It is actually a rational response. The initial claim was additional spending of $1.5B to $2B. Wall Street applies a P/E multiple to earnings. Well it works both ways, that P/E also gets applied to spending which results in lower earnings. The P/E was around 21 at the time, so 21 times $2B is $42B of market value. The remaining $13B of lost market value is probably over reaction that may disappear over time.

    If interested you can read the whole post here http://dondodge.typepad.com/the_next_big_thing/2006/05/there_will_be_m.html

  30. So…why is Vista important? I’ve tried the beta and it looks like OS X…shouldn’t I be buying a Mac instead?

  31. So…why is Vista important? I’ve tried the beta and it looks like OS X…shouldn’t I be buying a Mac instead?

  32. Robert, Communication was the problem for sure, although I am not convinced that starting with the grassroots would have helped in this particular case.

    I wrote a blog about this issue a few weeks ago. here is an excerpt;

    Microsoft management did a poor job of communicating to Wall Street, during the April 06 earnings conference call, that next year we plan to spend about $2B more than analysts expected. The stock price dropped more than 20% wiping out $55B in market value. Microsoft management was incredulous. How could Wall Street react in such an immature way? How could a couple billion in additional spending wipe out $55B of market value? It is all about communication…and how you clean up your messes.

    Microsoft should have communicated a clear plan, ahead of the earnings call, for how we planned to “invest” the money in new business opportunities, and the expected time frame to see results. Instead, it was suggested to analysts during the conference call that they should add $1.5B to $2B to their spending estimates for next year. It was only later, after the severe stock market reaction, that Microsoft “scrubbed the numbers” and clarified that it would be more like $1B, and gave clearer guidance on where the money would be invested. Too late. The market has already decided that given all the delays with “Longhorn/Vista” that the payoff for this $1B investment could be much longer than expected.

    How could $1B in investment cause a $55B reaction? It is actually a rational response. The initial claim was additional spending of $1.5B to $2B. Wall Street applies a P/E multiple to earnings. Well it works both ways, that P/E also gets applied to spending which results in lower earnings. The P/E was around 21 at the time, so 21 times $2B is $42B of market value. The remaining $13B of lost market value is probably over reaction that may disappear over time.

    If you are interested in the whole post you can find it here. http://dondodge.typepad.com/the_next_big_thing/2006/05/there_will_be_m.html

  33. Robert, Communication was the problem for sure, although I am not convinced that starting with the grassroots would have helped in this particular case.

    I wrote a blog about this issue a few weeks ago. here is an excerpt;

    Microsoft management did a poor job of communicating to Wall Street, during the April 06 earnings conference call, that next year we plan to spend about $2B more than analysts expected. The stock price dropped more than 20% wiping out $55B in market value. Microsoft management was incredulous. How could Wall Street react in such an immature way? How could a couple billion in additional spending wipe out $55B of market value? It is all about communication…and how you clean up your messes.

    Microsoft should have communicated a clear plan, ahead of the earnings call, for how we planned to “invest” the money in new business opportunities, and the expected time frame to see results. Instead, it was suggested to analysts during the conference call that they should add $1.5B to $2B to their spending estimates for next year. It was only later, after the severe stock market reaction, that Microsoft “scrubbed the numbers” and clarified that it would be more like $1B, and gave clearer guidance on where the money would be invested. Too late. The market has already decided that given all the delays with “Longhorn/Vista” that the payoff for this $1B investment could be much longer than expected.

    How could $1B in investment cause a $55B reaction? It is actually a rational response. The initial claim was additional spending of $1.5B to $2B. Wall Street applies a P/E multiple to earnings. Well it works both ways, that P/E also gets applied to spending which results in lower earnings. The P/E was around 21 at the time, so 21 times $2B is $42B of market value. The remaining $13B of lost market value is probably over reaction that may disappear over time.

    If you are interested in the whole post you can find it here. http://dondodge.typepad.com/the_next_big_thing/2006/05/there_will_be_m.html

  34. DMAD: and you’re missing mine, which you just made for me.

    The journalist’s editors were convinced because there was some heat in the street.

    Same goes for analysts and stock purchasers. If they call their geek friends and they all say “Microsoft is dead” then that’s what they’ll believe.

    I’ve been watching this behavior for quite some time.

    It’s amazing to me that corporate PR departments and corporate investor relation departments aren’t.

    In fact, even better. A lot of financial analysts read blogs (and, even write them). Heck, look at how fast this financial analyst got a blog post up about my crazy rantings: http://woodrow.typepad.com/the_ponderings_of_woodrow/2006/06/scoble_should_l.html

  35. DMAD: and you’re missing mine, which you just made for me.

    The journalist’s editors were convinced because there was some heat in the street.

    Same goes for analysts and stock purchasers. If they call their geek friends and they all say “Microsoft is dead” then that’s what they’ll believe.

    I’ve been watching this behavior for quite some time.

    It’s amazing to me that corporate PR departments and corporate investor relation departments aren’t.

    In fact, even better. A lot of financial analysts read blogs (and, even write them). Heck, look at how fast this financial analyst got a blog post up about my crazy rantings: http://woodrow.typepad.com/the_ponderings_of_woodrow/2006/06/scoble_should_l.html

  36. @27. Again, you are missing my point. I realize you want to think you matter. but, well, in the grand scheme of things related to Microsoft, you don’t. The MSM picked it up because some tech geek focused on blogging at some newspaper looked at the traffic and said “ooo, I think this might be a story because bloggers are talking about it”. Then no to be left out, every other tech arm of a newspaper picked it up. I thought you studied journalism?

  37. @27. Again, you are missing my point. I realize you want to think you matter. but, well, in the grand scheme of things related to Microsoft, you don’t. The MSM picked it up because some tech geek focused on blogging at some newspaper looked at the traffic and said “ooo, I think this might be a story because bloggers are talking about it”. Then no to be left out, every other tech arm of a newspaper picked it up. I thought you studied journalism?

  38. I’m not sure if it’s because I’m somewhat new to the more technical aspect of the industry, but a close friend of mine is an MSDN subscriber and now even I count down the days until a new beta of one of their software is delivered out through the system, and as far as I can tell, this is one of the few huge launches they’ve publically beta-d out to the public. I’m more than in love with this idea, it allows the general public to actually test out the software the news sources have always “first hands-on review” right along with them. To me, Microsoft has done a lot better this year not only with producing enriching software, but showing off their marketing side with a lot more of the XP commercials airing, allowing the public see videos of beta software and then try it themselves and on top of everything else, giving their employees a network of blogging software to blog their finds and inclusions of future MSFT products.

    So sure, the MSFT stock is dropping, and I’m sure it has to do with the Vista setback along with all these trendy Mac commercials being shown, but at the end of the day, MSFT still has a gigantic portion of the consumer and developer market, and from the software I’ve already beta-d this year, I see that progression furthering!

  39. I’m not sure if it’s because I’m somewhat new to the more technical aspect of the industry, but a close friend of mine is an MSDN subscriber and now even I count down the days until a new beta of one of their software is delivered out through the system, and as far as I can tell, this is one of the few huge launches they’ve publically beta-d out to the public. I’m more than in love with this idea, it allows the general public to actually test out the software the news sources have always “first hands-on review” right along with them. To me, Microsoft has done a lot better this year not only with producing enriching software, but showing off their marketing side with a lot more of the XP commercials airing, allowing the public see videos of beta software and then try it themselves and on top of everything else, giving their employees a network of blogging software to blog their finds and inclusions of future MSFT products.

    So sure, the MSFT stock is dropping, and I’m sure it has to do with the Vista setback along with all these trendy Mac commercials being shown, but at the end of the day, MSFT still has a gigantic portion of the consumer and developer market, and from the software I’ve already beta-d this year, I see that progression furthering!

  40. Excellent post! I would love to see Balmer show up to a few conferences and answer any question tossed at him. But Balmer is a guy that wants to put his head in the sand and act like the iPod doesn’t exist. He won’t allow his kids to own one which is incredibly stupid and tells you a lot of about him. I’ll be shocked if he listens to your suggestion because he’s not desperate. Now if MSFT stock were at Sun levels maybe he’d try something like you suggest. Balmer is old school Microsoft and he won’t change. His ‘in your face’ act was tired years ago.

  41. Excellent post! I would love to see Balmer show up to a few conferences and answer any question tossed at him. But Balmer is a guy that wants to put his head in the sand and act like the iPod doesn’t exist. He won’t allow his kids to own one which is incredibly stupid and tells you a lot of about him. I’ll be shocked if he listens to your suggestion because he’s not desperate. Now if MSFT stock were at Sun levels maybe he’d try something like you suggest. Balmer is old school Microsoft and he won’t change. His ‘in your face’ act was tired years ago.

  42. the analysis of the change in PR strategy rings very true.

    the conclusions regarding bloggers/grassroot affect on the stock price is very simplistic and naive in my opinion.

    buzz, blogging love, PR are only one (small) component that affects the market, bigger influences are the financials fundamentals and many other technical elements of the way institutionals buyers are looking at the stock.

    hype comes and goes.

  43. the analysis of the change in PR strategy rings very true.

    the conclusions regarding bloggers/grassroot affect on the stock price is very simplistic and naive in my opinion.

    buzz, blogging love, PR are only one (small) component that affects the market, bigger influences are the financials fundamentals and many other technical elements of the way institutionals buyers are looking at the stock.

    hype comes and goes.

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