Why Microsoft doesn’t deserve Facebook

First of all, think I’m the only one going gung-ho about Facebook? You’re nuts.

ReadWriteWeb is doing a week of nothing but Facebook.

I added a few more apps to my Facebook profile in the past day. My favorite application continues to be that Google Reader Shared Items one. It demonstrates the best value add that’s out there. It does something that could only be done on Facebook and with Facebook’s platform. Plus he’s been adding a new feature every day or so. Today he added groups to that app and it already is beating TechMeme on speed. I knew that when you study people’s reading behaviors that a new Digg or a new TechMeme is not only possible, but will bring something new to the table.

Anyway, back to my thesis. One of the things I found on the Google Reader facebook application was this post by Fred Wilson, A VC in NYC. In that post he tells why he believes Facebook won’t sell to anyone and if it did it’d get screwed up.

Now I used to advocate for all sorts of companies selling to Microsoft. Why? Well, for one, I thought it was smart for Microsoft to do. It would keep Microsoft part of the new Internet conversation and would bring some badly-needed fresh stream of ideas to its search team.

Now that I’m a Facebook nut case I am starting to care about what happens to Facebook and where it goes long term. I keep hearing that Microsoft is going to buy Facebook. That thought is starting to bum me out. Why? Microsoft doesn’t deserve Facebook.

Why do I say that? Well, Microsoft has remained on the sidelines in the new social services space for far too long. They haven’t bought best-of-breed anything in social software. Not in blogging. Not in photosharing. Not in bookmarking. Not in wiki’ing. Not in live search. Nothing. Not one best-of-breed company purchased.

So, they have no track record that would demonstrate that someone at Microsoft in leadership there “gets it.”

I’m sure they have lots of money to start throwing around, if they wanted to. It’s pretty obvious to me and most of the smart people in the tech industry that Facebook has value. You can argue about whether it’s $2 billion or $10 billion, but it clearly has value that lots of companies would love to have inhouse.

I personally hope it goes somewhere that the leadership will CARE about owning it, feeding it, and taking care of it. To me that means going someplace that has bought other social services. My top choice? Yahoo. Then Google. Yahoo has made a few mistakes with Flickr and its other services, for instance, but they are minor ones. For the most part they haven’t messed with those services after they bought them.

Microsoft has NO track record of buying best of breed social services on the Web and leaving them alone to mature.

The problem is that Microsoft has the money. They can outbid anyone. But I don’t think they deserve Facebook.

I vote for IPO since Yahoo isn’t able to put enough money on the table to close the deal. Readers over on Fred’s blog post say that Facebook should stay private.

What would you do if you ran Facebook?

108 thoughts on “Why Microsoft doesn’t deserve Facebook

  1. I have been horribly depressed since FB opened up to everyone. So much for being an academic social network. As far as I am concerned FB is doomed to become another MySpace.

    Although, I like Westy’s idea: classes of friends

  2. Well first off – MS did buy tell me and leave them alone for the most part (or so it appears), so dont completely give up on that end…

    Facebook? I say go at it alone – create the platform for the web – take on MS and google!!

  3. Well first off – MS did buy tell me and leave them alone for the most part (or so it appears), so dont completely give up on that end…

    Facebook? I say go at it alone – create the platform for the web – take on MS and google!!

  4. Anybody using TED.com ? It seems to be the social networking site for thinkers and doers!

  5. What would I do?

    I would buy and integrate both Linked In and Geni, creating 3 classes of ‘friends’.
    Business, Friends (true social friends), and Family

  6. What would I do?

    I would buy and integrate both Linked In and Geni, creating 3 classes of ‘friends’.
    Business, Friends (true social friends), and Family

  7. What would I do?

    I would not sell. I would either go public or stay private if I were them. So far, they have proven to be masters of innovation.

    Although, Facebook Apps might have been their last original idea and now they are just going to ride it for all it’s worth. If that is the case, then *they* know that they should sell, but I bet they have many more cards up their sleeves.

  8. What would I do?

    I would not sell. I would either go public or stay private if I were them. So far, they have proven to be masters of innovation.

    Although, Facebook Apps might have been their last original idea and now they are just going to ride it for all it’s worth. If that is the case, then *they* know that they should sell, but I bet they have many more cards up their sleeves.

  9. Between this:
    http://news.bbc.co.uk/1/hi/business/6388273.stm
    1.5B to alcotel-lucent

    9 Billion for the anti-trust crap from 2002-2005
    http://www.theinquirer.net/default.aspx?article=24621

    And a nice 7 Billion for facebook

    That should total close to 20 Billion in the past 5 years in investments with little or no return.
    Had the claria deal went through, you could have tacked on 500M to that ongoing total. I secretly wished it did.

    What does that mean for MSFT investors?
    No more divend payouts. A drop in confidence, and Ballmer finally booted out the door, with somebody telling him not to let the door hit him in the *ss on the way out. And a slow decent for MSFT in the same way borland did a few years ago.

    I hope MSFT does buy facebook. I wish it.

  10. Between this:
    http://news.bbc.co.uk/1/hi/business/6388273.stm
    1.5B to alcotel-lucent

    9 Billion for the anti-trust crap from 2002-2005
    http://www.theinquirer.net/default.aspx?article=24621

    And a nice 7 Billion for facebook

    That should total close to 20 Billion in the past 5 years in investments with little or no return.
    Had the claria deal went through, you could have tacked on 500M to that ongoing total. I secretly wished it did.

    What does that mean for MSFT investors?
    No more divend payouts. A drop in confidence, and Ballmer finally booted out the door, with somebody telling him not to let the door hit him in the *ss on the way out. And a slow decent for MSFT in the same way borland did a few years ago.

    I hope MSFT does buy facebook. I wish it.

  11. I couldn’t agree with you more, Robert! You have echoed EXACTLY the worry I have had since I read about the 6BN or however many BN phantom offer to buy Facebook. Microsoft is not able to even manage their own products and technologies in a forward-thinking, value-adding – - CUSTOMER SERVING – - way! How on earth would they be able to manage an acquisition this hot and still keep it hot and let it grow as it should? My only concern with your #1 pick is that you say YAHOO (OK, IPO, first; YAHOO, second). My hunch has been for some time is that Microsoft is trying to scoop up Yahoo. You can see small signs of it..lnot only in small press tidbits, but especially in how they are re-making Windows Live Messenger to look EXACTLY like Yahoo Messenger (OK, it’s still SLOW and too cluttery, but the similarities are too telling). So, where would we be if Yahoo bought Facebook and then Microsoft bought Yahoo? Ooooh, I don’t even want to contemplate it! Brings me back to my original idea to plead with Mr. Zuckerberg – - please! Don’t sell your soul to the devil! Sorry for the verbose comment…Keep up the good stuff, Robert! Cheers!

  12. I couldn’t agree with you more, Robert! You have echoed EXACTLY the worry I have had since I read about the 6BN or however many BN phantom offer to buy Facebook. Microsoft is not able to even manage their own products and technologies in a forward-thinking, value-adding – - CUSTOMER SERVING – - way! How on earth would they be able to manage an acquisition this hot and still keep it hot and let it grow as it should? My only concern with your #1 pick is that you say YAHOO (OK, IPO, first; YAHOO, second). My hunch has been for some time is that Microsoft is trying to scoop up Yahoo. You can see small signs of it..lnot only in small press tidbits, but especially in how they are re-making Windows Live Messenger to look EXACTLY like Yahoo Messenger (OK, it’s still SLOW and too cluttery, but the similarities are too telling). So, where would we be if Yahoo bought Facebook and then Microsoft bought Yahoo? Ooooh, I don’t even want to contemplate it! Brings me back to my original idea to plead with Mr. Zuckerberg – - please! Don’t sell your soul to the devil! Sorry for the verbose comment…Keep up the good stuff, Robert! Cheers!

  13. Make it a co-operative so that every member is a stakeholder and has a responsibility to ensure the safe and continued growth of the business, led by a facebook-member appointed committee with facebook election campaigns and erm…other things!

  14. Make it a co-operative so that every member is a stakeholder and has a responsibility to ensure the safe and continued growth of the business, led by a facebook-member appointed committee with facebook election campaigns and erm…other things!

  15. Paul: Twitter hype is coming back later this week.

    >It’s getting to the point that I’m thinking you are being paid to hype Facebook. Which I’m sure is not true, but it almost seems that way.

    I’m not the only one hyping it up. Consensus at dinner tonight is it is THE THING to pay attention to on the Web right now.

    Until someone convinces me there’s something more important (I note you didn’t try to do that) then I’ll keep talking about Facebook and iPhone.

  16. Paul: Twitter hype is coming back later this week.

    >It’s getting to the point that I’m thinking you are being paid to hype Facebook. Which I’m sure is not true, but it almost seems that way.

    I’m not the only one hyping it up. Consensus at dinner tonight is it is THE THING to pay attention to on the Web right now.

    Until someone convinces me there’s something more important (I note you didn’t try to do that) then I’ll keep talking about Facebook and iPhone.

  17. I suspect Facebook will eventually get bought over by one of the 300 Pound gorrilas you mentioned Google/Yahoo!/Microsoft or even IAC. This however may not happen anytime soon but after all the hype has died down. Monetization of social networks is still a very nascent science and there in will lie Facebook’s challenge.

  18. I suspect Facebook will eventually get bought over by one of the 300 Pound gorrilas you mentioned Google/Yahoo!/Microsoft or even IAC. This however may not happen anytime soon but after all the hype has died down. Monetization of social networks is still a very nascent science and there in will lie Facebook’s challenge.

  19. I am a Microsoftie. But I have to sadly admit:
    Forget the Microsoft Execs killing Facebook. The Microsoft Office Org where Facebook might get shoved into is filled with feature-crazy dinosaurs. They will decide to strip widgets from Facebook and make them web-parts on Sharepoint!

  20. I am a Microsoftie. But I have to sadly admit:
    Forget the Microsoft Execs killing Facebook. The Microsoft Office Org where Facebook might get shoved into is filled with feature-crazy dinosaurs. They will decide to strip widgets from Facebook and make them web-parts on Sharepoint!

  21. @31 ““If you had $2B of your own money on the line, would you buy Facebook?”

    No, the real question is, would you get more than $2BB value out of it? Otherwise, why would you part with your $2BB. And for a business, if they bought Facebook, how soon would they make their money back, and then start MAKING money on it? If that wasn’t the goal, then why buy it?

  22. @31 ““If you had $2B of your own money on the line, would you buy Facebook?”

    No, the real question is, would you get more than $2BB value out of it? Otherwise, why would you part with your $2BB. And for a business, if they bought Facebook, how soon would they make their money back, and then start MAKING money on it? If that wasn’t the goal, then why buy it?

  23. Going public or selling out is just about cashing out. If Zuckerberg wants to change the world, Facebook should stay private. Google should have stayed private too: they could have been smaller, more secretive, moved faster and not had to answer to anyone.

    As for facebook, this has been done before with MySpace and geocities before that. The number of features have grown but the layout of facebook doesn’t really make it a “platform”. I’m not going to sign up for a facebook account to read RSS feeds.

    As for Microsoft, anytime they buy something it’s the kiss of death. Look what they did to hotmail after all these years. That had the potential to be a #1 platform… how it’s stagnated should be a case study in business school curriculum.

  24. Going public or selling out is just about cashing out. If Zuckerberg wants to change the world, Facebook should stay private. Google should have stayed private too: they could have been smaller, more secretive, moved faster and not had to answer to anyone.

    As for facebook, this has been done before with MySpace and geocities before that. The number of features have grown but the layout of facebook doesn’t really make it a “platform”. I’m not going to sign up for a facebook account to read RSS feeds.

    As for Microsoft, anytime they buy something it’s the kiss of death. Look what they did to hotmail after all these years. That had the potential to be a #1 platform… how it’s stagnated should be a case study in business school curriculum.

  25. As several folks mentioned, what I personally want and what I would do if I was Mark are two entirely different things.

    If I owned FB, it probably have been sold much earlier so that I could retire to some obscure little place in the mountains with no wires and low accessibility. As an enthusiastic user, I’m having spasms just thinking about what MS would do to FB. Please God, no. Mark should stay independent for as long as possible.

    I’m a big Google junkie and wouldn’t really mind them taking over most of the world, but I don’t want *anyone* touching FB.

  26. As several folks mentioned, what I personally want and what I would do if I was Mark are two entirely different things.

    If I owned FB, it probably have been sold much earlier so that I could retire to some obscure little place in the mountains with no wires and low accessibility. As an enthusiastic user, I’m having spasms just thinking about what MS would do to FB. Please God, no. Mark should stay independent for as long as possible.

    I’m a big Google junkie and wouldn’t really mind them taking over most of the world, but I don’t want *anyone* touching FB.

  27. Whether it’s Microsft, someone else, or if they stay private I would really like to see Facebook continue on its present course of becoming a platform and of facilatating community. I think that one of its biggest strengths is how it facilitates the creation of cross organizational communities in a relatively (for the web) secure and controlled environment. The addition of apps is great and needed but I think it is this community aspect that will help to really give it legs as it facilitates/fosters discourse and networking in a world where we are all scrambling to keep up with the technical churn, and where who you know is becoming as important, or more so, than what you know. Access, and interaction with many minds provides synergy beyond the individual and I think Facebook has really nailed tat aspect. Some added functionality is needed and some kinks to iron out but I think they are best positioned to provide this service that will grow in importance over the next several years technology developments continue to evolve the workplace at an ever quickining pace. If an organization was to purchase it I would hope they would continue to build on these aspects and not morph it in to something else with short sighted vision.

  28. Whether it’s Microsft, someone else, or if they stay private I would really like to see Facebook continue on its present course of becoming a platform and of facilatating community. I think that one of its biggest strengths is how it facilitates the creation of cross organizational communities in a relatively (for the web) secure and controlled environment. The addition of apps is great and needed but I think it is this community aspect that will help to really give it legs as it facilitates/fosters discourse and networking in a world where we are all scrambling to keep up with the technical churn, and where who you know is becoming as important, or more so, than what you know. Access, and interaction with many minds provides synergy beyond the individual and I think Facebook has really nailed tat aspect. Some added functionality is needed and some kinks to iron out but I think they are best positioned to provide this service that will grow in importance over the next several years technology developments continue to evolve the workplace at an ever quickining pace. If an organization was to purchase it I would hope they would continue to build on these aspects and not morph it in to something else with short sighted vision.

  29. @smorty71: It’s hard to think of such huge amounts of money, but yeah, I think it’s pretty safe to say if you want to lend me the money I’ll make an offer ;)

  30. @smorty71: It’s hard to think of such huge amounts of money, but yeah, I think it’s pretty safe to say if you want to lend me the money I’ll make an offer ;)

  31. @Scoble. Google reader is destroying value of blogs, because the most interesting part of blog is comment section, but Google reader makes you ignore that. So I’m surprising why do you praise it so often.

  32. @Scoble. Google reader is destroying value of blogs, because the most interesting part of blog is comment section, but Google reader makes you ignore that. So I’m surprising why do you praise it so often.

  33. If it were worth a billion, why wouldn’t you sell? how much more do you need? Seriously- greed is going to pummel these people. The lawyers will get the dough.

    Rocky-

  34. If it were worth a billion, why wouldn’t you sell? how much more do you need? Seriously- greed is going to pummel these people. The lawyers will get the dough.

    Rocky-

  35. Facebook, Facebook, Facebook. Come on Scoble, we get that Facebook is the next best thing to sliced bread but come on, there is other news besides Facebook, Facebook, Facebook. It’s getting to the point that I’m thinking you are being paid to hype Facebook. Which I’m sure is not true, but it almost seems that way.

  36. Facebook, Facebook, Facebook. Come on Scoble, we get that Facebook is the next best thing to sliced bread but come on, there is other news besides Facebook, Facebook, Facebook. It’s getting to the point that I’m thinking you are being paid to hype Facebook. Which I’m sure is not true, but it almost seems that way.

  37. Amen to Josh. Facebook should remain private as long as they can and then go public. But I would also like Facebook to open up a bit more. The idea that my data is held inside a proprietary system sends jitters through me.

  38. Amen to Josh. Facebook should remain private as long as they can and then go public. But I would also like Facebook to open up a bit more. The idea that my data is held inside a proprietary system sends jitters through me.

  39. At this point, if I ran Facebook, I would sell. Since thing move so fast, you never know what could happen before an IPO. And it would be quite enough money for a lifetime already.

    About the other points. I am not sure.

    I think Microsoft might be able to get it right. It’s exactly what they need. It’s a good platform to expand upon. Anyone in the tech industry you tries Facebook, gets it pretty fast on how it is powerful. For that reason, I would give them the benefit of the doubt to improve it. And, with the focus on the API and developers, that segment is at least something Microsoft understands well.

    In any case, if they do buy it, Microsoft really need to put all execs on Facebook for a month before touching anything.

  40. At this point, if I ran Facebook, I would sell. Since thing move so fast, you never know what could happen before an IPO. And it would be quite enough money for a lifetime already.

    About the other points. I am not sure.

    I think Microsoft might be able to get it right. It’s exactly what they need. It’s a good platform to expand upon. Anyone in the tech industry you tries Facebook, gets it pretty fast on how it is powerful. For that reason, I would give them the benefit of the doubt to improve it. And, with the focus on the API and developers, that segment is at least something Microsoft understands well.

    In any case, if they do buy it, Microsoft really need to put all execs on Facebook for a month before touching anything.

  41. Seems bizarre to say that if bought you’d want it to go to someone like Yahoo or Google. Neither are any better and Google is even worse when it comes to allowing a company they purchase to continue to innovate.

  42. Seems bizarre to say that if bought you’d want it to go to someone like Yahoo or Google. Neither are any better and Google is even worse when it comes to allowing a company they purchase to continue to innovate.

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