Thoughts on Entrepreneurship & Life by Sam Huleatt

The Steve Ballmer Ballad

From the comments of a great blog (see my analysis below):

Ravi on October 2nd, 2007:

It is funny when bloggers make this type of simplistic arguments that Ballmer doesn’t get it, but Scoble does. Do you think Ballmer is not smart enough to understand that it is the 40 million users Facebook signed up that is more important and not the technology? He is running a company that is worth 200 billion+, give folks like Ballmer some credit before making this kind of analysis.

It could be that he is downplaying FB to reduce the 10 billion$ valuation hype that seems to be floating. (I am not an employee of MS)

Josh on October 2nd, 2007:

Ravi, I’m sure Ballmer is a smart guy “but his comment was about the technology”

So, if he does get it and realizes the community is what’s valuable, then why don’t we see some moves toward that end? Why can’t he say so?

Or, if as you say he’s trying to throw someone off the scent (trying to drive down the FB valuation)” he’s being pretty clumsy about it.

I sometimes thing that we should give people in impressive positions the benefit of the doubt getting there” but, well, look at some of the Presidents we’ve had. All smart guys, but boy do they say and do some dumb things.

Me:

Of course Ballmer gets it, but what Ballmer doesn’t get is the inability of social media platforms to monetize users. He’s not betting against the internet, he’s looking to avoid irrational exuberance. Microsoft makes products that people pay money for and that people are locked into using with high switching costs (.doc). To then go and invest in a company such as Facebook that 1) does not monetize its site well and 2) has almost zero switching costs, would be considered insane in almost any other industry.

Maybe it’s a risk Microsoft is willing to take, but it’s still a major risk.

Update: Ballmer on ‘young people and fads‘ and more on the faddish nature of kids

Update: Techcrunch chimes in

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