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Wednesday, October 3, 2007

Steve Ballmer still doesn’t understand social networking

Steve Ballmer still doesn’t understand social networking

"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."

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