A few years ago I wrote to Microsoft’s leadership and asked them why they weren’t involved in the new Web 2.0 space. I got an answer back that was about 2,000 words long and included the words “business value” 13 times. Translation: Microsoft’s leadership thought that Web 2.0 and social software like Flickr didn’t have business value and was too much of a potential fad to invest in.
Glad to see that Steve Ballmer, Microsoft’s CEO, is consistent. Notes that Geocities lost most of its value after being acquired by Yahoo and says “it had most of what Facebook has.” Let’s come back to that point in a second.
The thing is that Ballmer has bought into the advertising hype too. I remember when Microsoft’s President, Kevin Johnson, came to our group when I worked at Microsoft and explained that the advertising industry is 10x the size of the software industry and that he was going to steer Microsoft more into an advertising-driven business rather than just one that made its revenues from selling software. Translation: Microsoft was going to compete more with Google, Yahoo, and other companies going after the advertising pie.
Don’t miss this quote. It’s demonstrates everything that is wrong with Microsoft’s approach:
“There can’t be any more deep technology in Facebook than what dozens of people could write in a couple of years. That’s for sure,” Ballmer said.
When I worked at Microsoft I heard this over and over and over again from various engineers and program managers who STILL haven’t competed effectively with WordPress, Flickr, Skype, YouTube, or any of the other things over the years I’ve heard this “we can build that in a few weeks” kind of arrogant attitude attached to.
But, remember eBay? Remember how dozens of competitors tried to get into the eBay space? (and still are?)
Why aren’t they succeeding? Because eBay is NOT about the technology. It’s about the community and unless you have something that’ll convince the buyers and sellers all to switch all at one moment you’ll never be able to take eBay’s market away. Translation: it’s too late and eBay has huge defensibility around its business because people won’t move away from it even if you demonstrate 5x better technology.
Same with Facebook. I’m not moving away from it. Why? I have 5,000 reasons why (and another 500 already who want to be included in my Facebook network). Unless you can convince them all to move I’m not moving. This is why LinkedIn isn’t going to disappear anytime soon, even though I like Facebook’s approach a lot better. It’s also why MySpace isn’t going anywhere. My son says his friends are all on MySpace. My brother’s bar is on MySpace. They aren’t moving no matter how hard I evangelize Facebook.
Which gets us back to Ballmer’s quotes.
First, let’s share this one: “I think these things [social networks] are going to have some legs, and yet there’s a faddishness, a faddish nature about anything that basically appeals to younger people,” Mr Ballmer told Times Online yesterday.
I’m 42. Hardly young. And Facebook is appealing a lot to people in my social network and age group lately (and so is Twitter and other social tools like Pownce, LinkedIn, and sites that use social groups like Yelp, Flickr, Upcoming.org). I guess Ballmer missed that. This is what happens when Microsoft executives don’t get outside of their ivory towers very often. Steve, you really need to go to any tech industry conference and hang out in the hallways. Don’t come to San Francisco, you won’t believe anything you hear here anyway. But go to, say, LeWeb3 in Paris and hear what they say about social networks. You’ll probably hear Bebo. Facebook. And a few others. From even the old folks. Last night I was at a National Geographic event and lots of people were talking about Facebook.
Here’s another quote:
Mr Ballmer also noted that sites such as Geocities, an online community that was bought for $3 billion by Yahoo! in 1999, at the height of the dot-com boom, “had most of what Facebook has.”
Oh, boy. No way, no how.
First of all, I never joined Geocities. It never had utility for me. It was a place to build free Web sites. I found it had all the disadvantages to me that MySpace has and NONE of the advantages of Facebook. It was NOT a social network that exerted the kind of social pressure on me to join the way that Facebook did. I tried to ignore Facebook for years. Same with MySpace. But people I kept meeting kept begging me to join. Kevin Rose, when we had dinner, told me I was blowing it by not being on Facebook. That NEVER happened with Geocities.
Also, Facebook is now a business card collection. A rolodex. That has real utility that’ll keep me using it long after it joins the “old fad bin.”
Oh, and anytime people say “this thing is a fad?” I think of blogging. Lots of people told me that when I started it too. It wasn’t. Neither is Facebook.
But all this makes me think that Ballmer is trying to send signals to Zuckerberg (Facebook’s CEO) that the price is too high and that this is just a negotiating ploy. Nice one! But it doesn’t give me confidence that Microsoft is going to figure out Web 2.0 or social networking strategies anytime soon.
It also makes me realize that Ballmer has no clue about the future of advertising. If he did he’d be talking about how Facebook’s ability to concentrate people into buckets in a new way should be copied and studied. That’s where Facebook’s real advertising value is and Microsoft hasn’t demonstrated ANY ability to see that yet. Of course, Facebook itself hasn’t shipped its advertising platform that’ll demonstrate its vision there either, but I hear it’s coming.
Will Microsoft get a clue before Facebook gets an entrenched advertising platform going?
Ballmer proved with Google and with these quotes today: no.
[...] Scoble has a good blog post about how Microsoft doesn’t understand Social Networking and I think he makes a really good [...]
[...] ce sujet, un des posts les plus intéressants est celui de Robert Scoble, ancien “blogueur en chef” de chez MS. Il nous parle notamment d’une attitude [...]
[...] Scoble gets it but missed (imho) the bottomline. [...]
[...] Scobleizer blog, former Microsoft tech evangelist (and admitted Facebook cheerleader) Robert Scoble hits back: I’m 42. Hardly young. And Facebook is appealing a lot to people in my social network and age [...]
[...] • Ballmer: Facebook risks being ‘a fad’ and Steve Ballmer still doesn’t understand social networking [...]
[...] Steve Ballmer still doesn’t understand social networking « Scobleizer (tags: facebook microsoft socialnetworking socialnetworks web2.0 community business technology advertising blog) [...]
Great post, Robert. I’m not sure what world Mr. Ballmer lives in, but I believe it involves an unsinkable ship and an iceberg.
Great post, Robert. I’m not sure what world Mr. Ballmer lives in, but I believe it involves an unsinkable ship and an iceberg.
[...] don’t know what’s more breathtaking: Steve Ballmer’s ignorance or arrogance. Together, it’s a pretty embarrassing combination for [...]
You right a ton of stuff, Robert. This one was dead on. But it’s bigger than MSFT and social networking. I think it pervades big companies as they deal with disruptive technologies.
More on that thought at: http://tinyurl.com/3bvupt
~Jim
You right a ton of stuff, Robert. This one was dead on. But it’s bigger than MSFT and social networking. I think it pervades big companies as they deal with disruptive technologies.
More on that thought at: http://tinyurl.com/3bvupt
~Jim
[...] Steve Ballmer still doesn’t understand social networking « Scobleizer Mr Ballmer also noted that sites such as Geocities, an online community that was bought for $3 billion by Yahoo! in 1999, at the height of the dot-com boom, “had most of what Facebook has.” (tags: facebook microsoft socialnetworking socialnetworks web2.0 community business social-networking social_networking socialsoftware technology) digg_url=’http://xiled.rss-central.net/blog/2007/10/03/links-for-2007-10-04/’; digg_skin = ‘compact’; digg_bgcolor = ‘#FFFFFF’; digg_title = ‘links for 2007-10-04′; digg_bodytext = ”; digg_topic = ”; Powered by Gregarious (41) Share This [...]
[...] It’s hard to believe that the Scobleizer once worked for Microsoft: viz, this post: Steve Ballmer Still Doesn’t Understand Social Networking. [...]
[...] Réponse déchaînée des gens qui crient au scandale. Robert Scoble détaille d’ailleurs de vrais arguments contre [...]
[...] Steve Ballmer still doesn’t understand social networking « Scobleizer (tags: facebook microsoft architecture of participation ecosystems) This entry was written by iand and posted on 04 October 2007 at 6:20 am and filed under linkblog. Bookmark the permalink. Follow any comments here with the RSS feed for this post. Post a comment or leave a trackback: Trackback URL. « links for 2007-10-01 [...]
[...] of people claiming that this could be nothing further from the truth; Robert Scoble puts forward one of the better arguments against [...]
[...] Robert Scoble uses the context of Microsoft’s lack of Web 2.0 success, to talk about why some social networks such as Flickr and Facebook are more powerful than the mere technology they sit upon: [...]
My bad, that comment was on another entry…
Today I was browsing my cousin’s wife’s profile on Facebook and I saw a post by her father on her wall (he’s obviously also “hardly young”). Translated directly from Dutch, this is what he wrote:
“I am trying out Facebook because ‘Scobleizer” basically says you are an idiot if you aren’t on it”
Thought you might enjoy!
My bad, that comment was on another entry…
Today I was browsing my cousin’s wife’s profile on Facebook and I saw a post by her father on her wall (he’s obviously also “hardly young”). Translated directly from Dutch, this is what he wrote:
“I am trying out Facebook because ‘Scobleizer” basically says you are an idiot if you aren’t on it”
Thought you might enjoy!
[...] are all in a huff about Ballmer being, as far as I can tell, Ballmer. “I think these things [social networks] are [...]
[...] Business Dan Saya Posted on October 5, 2007 by Tukang Ketik Abis baca ini: Steve Ballmer still doesn’t understand social networking Dan mendapatkan kutipan yang bagus [...]
[...] he had helped himelf to yours. In contrast, Steve Ballmer is your embarrassing uncle (like in his recent attempt to downplay Microsoft’s interest in Facebook by calling it a fad. Yes, Steve, it may be a fad but no-one believes your poker face and it’s [...]
“When I worked at Microsoft I heard this over and over and over again from various engineers and program managers who STILL haven’t competed effectively with WordPress, Flickr, Skype, YouTube, or any of the other things over the years I’ve heard this “we can build that in a few weeks” kind of arrogant attitude attached to.”
Even us engineers understand that sometimes the fact that you can build something doesn’t mean you should.
Which of those are making money?
“When I worked at Microsoft I heard this over and over and over again from various engineers and program managers who STILL haven’t competed effectively with WordPress, Flickr, Skype, YouTube, or any of the other things over the years I’ve heard this “we can build that in a few weeks” kind of arrogant attitude attached to.”
Even us engineers understand that sometimes the fact that you can build something doesn’t mean you should.
Which of those are making money?
You are the answer (or rather your age is
)
You are the answer (or rather your age is
)
[...] yang besarnya 10 kali lipat daripada pasar bisnis software. Informasi yang kuperoleh dari Scobleizer ini membuatku mengerti logika permainan bisnis yang sedang [...]
[...] David Lee King 同意 Robert Scoble 所說的，認為 “… eBay is NOT about the technology. It’s about the [...]
[...] est facile de dire que ce type ne comprend rien aux réseaux sociaux, ce que font Robert Scoble (ancien de Microsoft) et tous les biens pensants de web 2.0 [...]
It gets more confusing day by day. I don’t know what a blog is, so I search for answers. Once I figure out the purpose of blogging, will I be blogging because everyone else is doing it? I don’t need to keep up with the Joneses’ to be savvy about technology. If we really want to do social networking, shut off your computer, and go out and visit a nursing home, children’s cancer centers, join a club, visit an old friend, but visit people “in person”, not on the internet. This social networking you are talking about is not even close to being social. It is just black text on a white background, and the new buzz word, I think they are called bloggers, are all coming up with a clever line, but is it coming from the blogger’s heart or his brain with no roots. These are fads, and will fade. Keep in mind, there are more frauds, scams, spams, identity thefts, hacking, porn, you name it, since the internet was introduced. A lot of people have fun with it, a lot of people learn from it, and a lot of children and grownups have been hurt by it. As John Selden, Table-Talk preached, “Rhetoric without logic is like a tree with leaves and blossoms, but no roots.
It gets more confusing day by day. I don’t know what a blog is, so I search for answers. Once I figure out the purpose of blogging, will I be blogging because everyone else is doing it? I don’t need to keep up with the Joneses’ to be savvy about technology. If we really want to do social networking, shut off your computer, and go out and visit a nursing home, children’s cancer centers, join a club, visit an old friend, but visit people “in person”, not on the internet. This social networking you are talking about is not even close to being social. It is just black text on a white background, and the new buzz word, I think they are called bloggers, are all coming up with a clever line, but is it coming from the blogger’s heart or his brain with no roots. These are fads, and will fade. Keep in mind, there are more frauds, scams, spams, identity thefts, hacking, porn, you name it, since the internet was introduced. A lot of people have fun with it, a lot of people learn from it, and a lot of children and grownups have been hurt by it. As John Selden, Table-Talk preached, “Rhetoric without logic is like a tree with leaves and blossoms, but no roots.
[...] Scoble, in Steve Ballmer still doesn’t understand social networking: “When I worked at Microsoft I heard this over and over and over again from various engineers [...]
thank u ,,,,,,,,,
Very good article. Thanks for the good information!.
Very good article. Thanks for the good information!.
I don’t normally leave comments… but I really enjoyed your post! I will be leaving a link back here in my blogroll! Thanks!
I don\’t normally leave comments… but I really enjoyed your post! I will be leaving a link back here in my blogroll! Thanks!
very interesting post, thanks for sharing.
very interesting post, thanks for sharing.
“2 years later… go see the doctorrrrr”From a usage perspective the above is ALL correct.. From a business perspective (and Steve IS a business man) this is crap. We now all know that YouTube is bleeding .5 billon anually and that even Facebook is loosing millions every month.The fundament of Web 2.0 is an open, free environment that relies on advertising. Trouble is that the last years have shown that the market value of social networks IS perishable (as everything is), meaning that investors need to invest continuously in creating and marketing new online brands to keep the longtail going. The cost of this investment cannot (to date) be earned back.It may seem that big brands such as YouTube and Facebook are the winners with millons egaged users, but in fact they are in the 'autumn' of their life cycle… In the end: the bigger the brand, the bigger the stakes and the bigger the growth expectations. But also, the broader the audience, the lesser the the social context, the lesser the user is known, the lesser advertisers are willing to spend per dialogue,…
“2 years later… go see the doctorrrrr”
From a usage perspective the above is ALL correct.. From a business perspective (and Steve IS a business man) this is crap. We now all know that YouTube is bleeding .5 billon anually and that even Facebook is loosing millions every month.
The fundament of Web 2.0 is an open, free environment that relies on advertising. Trouble is that the last years have shown that the market value of social networks IS perishable (as everything is), meaning that investors need to invest continuously in creating and marketing new online brands to keep the longtail going. The cost of this investment cannot (to date) be earned back.
It may seem that big brands such as YouTube and Facebook are the winners with millons egaged users, but in fact they are in the 'autumn' of their life cycle… In the end: the bigger the brand, the bigger the stakes and the bigger the growth expectations. But also, the broader the audience, the lesser the the social context, the lesser the user is known, the lesser advertisers are willing to spend per dialogue,…
[...] that has the potential to achieve some level of lock-in. As for the other seven, Steve Ballmer would probably say his people could build this in a few months, and you know what? He’d be right. What’s [...]
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For the sake of all Microsoft stock holders Steve Ballmer must step down!
Ballmer must step down!
For the sake of all Microsoft stock holders Steve Ballmer must step down!