I was reading Steve Ballmer scratching his head in BusinessWeek where he was wondering about the valuations that are getting paid out for companies like Skype and YouTube.
Good to hear that Ballmer’s leadership on the social software industry has remained consistent since he turned down Flickr when that sold to Yahoo for $30 million. I, and others, told Microsoft’s execs to start buying everything that moved in the social software space cause we knew that valuations were gonna be much more expensive later on. The executive leadership at Microsoft didn’t believe us. Still doesn’t.
Don’t miss Ballmer’s question here: “[You’ve got to ask] could Google do whatever it is they’re hoping to buy without paying $1.6 billion?” That’s Microsoft’s engineering culture coming through. Clearly Ballmer believes he can build YouTube for less.
The thing is, YouTube is two SEPARATE things: 1) the technology. 2) the community/brand.
Doing the technology is fairly straightforward. I’m sure that could be built for $100 million or less. Probably far less if they really are smart about how they go about it.
But duplicate the community and brand (er, those eyeballs, as Ballmer calls them) is far far far more difficult. The fact that he insists on calling me a set of eyeballs tells me Ballmer doesn’t understand the trend here. Why we love YouTube isn’t cause we can watch other people’s videos. It’s cause we can upload our own lame videos!!!
Now, will Microsoft be able to spend less than $1.6 billion and build their own YouTube? Maybe. Why? Cause Microsoft will have to spend hundreds of millions (probably more than a billion) in advertising just to attempt to appear “cool” and get people to try its video service.
Even then, as AT&T has demonstrated, spending a billion on marketing is no assurance you’ll come out the other end with a good audience and with people thinking you’re cool.
Google realized it couldn’t make its own video service look as cool as YouTube. Too bad Ballmer still hasn’t figured out he can’t buy his way into cool without buying some things that are cool.
Back to Facebook. Is it worth as much as YouTube? I don’t think so because only college students associate with that brand. With YouTube everyone from 80-year-old friends to my son were using it and talking about it. Facebook is struggling to make its brand interesting to non college students. So far it has failed, which is why I don’t think it’s worth as much as YouTube.
Scobleizer 
yet again, Scoble blogs and everyone thinks he is the first to everything.
Truth was we were emailing eachother about this and I sent you the link and asked you what you thought. Buying everything that moves in the social fad is really idiotic. thats Web Bubble thinking there. lets hope Podtech doesnt give you a check this time.
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yet again, Scoble blogs and everyone thinks he is the first to everything.
Truth was we were emailing eachother about this and I sent you the link and asked you what you thought. Buying everything that moves in the social fad is really idiotic. thats Web Bubble thinking there. lets hope Podtech doesnt give you a check this time.
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Your keen awareness of the echo chamber comes out in this post. I agree with you, but I also think that you say it much louder because you live and work and breath in that silicon valley echo chamber. It may make a ton of cool things, most of which I really like… but the rest of the world and the rest of the US doesn’t care as much.
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Your keen awareness of the echo chamber comes out in this post. I agree with you, but I also think that you say it much louder because you live and work and breath in that silicon valley echo chamber. It may make a ton of cool things, most of which I really like… but the rest of the world and the rest of the US doesn’t care as much.
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I don’t really care if YouTube has 2 Billion hits per hour, its a company that doesnt even have profits yet. they only had 11 million in investment money. I bet MSFT is laughing.
let Google waste their 11 Billion in stock cash (which will deflate when investors see them not growing as fast). what Scoble doesn’t know is that speculators are holding that 400 dollar mark. it’s really a artificial high, not based on real solid numbers.
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I don’t really care if YouTube has 2 Billion hits per hour, its a company that doesnt even have profits yet. they only had 11 million in investment money. I bet MSFT is laughing.
let Google waste their 11 Billion in stock cash (which will deflate when investors see them not growing as fast). what Scoble doesn’t know is that speculators are holding that 400 dollar mark. it’s really a artificial high, not based on real solid numbers.
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Did Warren Buffet buy any Google stock? no because he was taught by one of the BEST investors and profesors in the world. Benjamin Graham “Most of the time common stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble… to give way to hope, fear and greed.”.
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Did Warren Buffet buy any Google stock? no because he was taught by one of the BEST investors and profesors in the world. Benjamin Graham “Most of the time common stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble… to give way to hope, fear and greed.”.
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Monkey-man scratching his head? Yeah, I can picture that. Developers! Developers! Developers! 🙂
MS should get rid of him. Gates won’t come back. He left at the apex of the MS roller-coaster ride and Ballmer’s riding the downturn.
Ballmer, look left! Google Office (docs.google.com). Look right! FireFox. Look up! Apple. I can see the sweat building in his armpits…
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Monkey-man scratching his head? Yeah, I can picture that. Developers! Developers! Developers! 🙂
MS should get rid of him. Gates won’t come back. He left at the apex of the MS roller-coaster ride and Ballmer’s riding the downturn.
Ballmer, look left! Google Office (docs.google.com). Look right! FireFox. Look up! Apple. I can see the sweat building in his armpits…
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Google Talk – Failed
Google Mail – Failed
Google Docs and Spreadsheet – Will Fail
people don’t trust the internet nor will they be willing to put their docs and financial info on the web or trust google with it.
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Google Talk – Failed
Google Mail – Failed
Google Docs and Spreadsheet – Will Fail
people don’t trust the internet nor will they be willing to put their docs and financial info on the web or trust google with it.
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digitaltiger, you can add Google Video to the list of Google’s failures.
Robert, how much is Ballmer worth vs you?
Yep, that’s what I thought.
BTW, the latest rumor is that Google is going to buy FaceBook for 2.3 billion. That’s after already spending 0.9 billion on MySpace advertising rights. And Google will still have to honor the Facebook-MS contract that gives MS exclusive advertising rights for FaceBook, so Google will get none of FaceBook’s advertising revenue anyway, unless they buy out the MS contract (and don’t expect MS to go away cheaply on that score).
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digitaltiger, you can add Google Video to the list of Google’s failures.
Robert, how much is Ballmer worth vs you?
Yep, that’s what I thought.
BTW, the latest rumor is that Google is going to buy FaceBook for 2.3 billion. That’s after already spending 0.9 billion on MySpace advertising rights. And Google will still have to honor the Facebook-MS contract that gives MS exclusive advertising rights for FaceBook, so Google will get none of FaceBook’s advertising revenue anyway, unless they buy out the MS contract (and don’t expect MS to go away cheaply on that score).
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Who cares if Warren Buffet didn’t buy GOOG’s common shares? Many idiots & smart people bought GOOG shares and are doing “fine”. Anyway, it’s probably a good idea to sell GOOG shares now. The shares are obviously overpriced and their P/E ratio is way too high.
Google was really smart when they paid $1.6 billion in SHARES and not pure “cash”. = They bought YouTube at a bargain.
IMHO, Microsoft just doesn’t get it. They think they can do everything better than everyone else, but their products are just “adequate”. There’s nothing innovative about their products. There’s no “WOW” or “COOL” factors associated with any of their products. I mean, look at Zune. It’s pure ugliness.
Anyway, I’m a university student and I definitely don’t think that Facebook is worth as much as YouTube. I have an account at Facebook, but I don’t update my page anymore. My friends don’t update their pages either. It’s only interesting in the beginning, then the excitement dies down (really fast). All these social networking sites (Facebook, MySpace, etc.) do is waste people’s valuable time and bombard people with advertisements. I’d say only 5% of my friends have social networking accounts.
Facebook is probably worth MUCH less than MySpace or YouTube.
It would be nice if Google purchases the Facebook since Orkut is just plain ugly and useless, but I don’t think they HAVE to buy it. Now that they have YouTube, they can integrate it with Blogger, Orkut, Picasa Web Albums, and various other products to create a bigger social networking product.
As far as innovations and “wow/cool” factors go, Yahoo and Google are doing great. I’m really impressed with Yahoo Mail Beta (although I don’t use it) and docs.google.com as well as Gmail (Gmail needs an interface makeover!).
Robert, I really enjoy reading your blog. Keep bloggin’!
-TK
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Who cares if Warren Buffet didn’t buy GOOG’s common shares? Many idiots & smart people bought GOOG shares and are doing “fine”. Anyway, it’s probably a good idea to sell GOOG shares now. The shares are obviously overpriced and their P/E ratio is way too high.
Google was really smart when they paid $1.6 billion in SHARES and not pure “cash”. = They bought YouTube at a bargain.
IMHO, Microsoft just doesn’t get it. They think they can do everything better than everyone else, but their products are just “adequate”. There’s nothing innovative about their products. There’s no “WOW” or “COOL” factors associated with any of their products. I mean, look at Zune. It’s pure ugliness.
Anyway, I’m a university student and I definitely don’t think that Facebook is worth as much as YouTube. I have an account at Facebook, but I don’t update my page anymore. My friends don’t update their pages either. It’s only interesting in the beginning, then the excitement dies down (really fast). All these social networking sites (Facebook, MySpace, etc.) do is waste people’s valuable time and bombard people with advertisements. I’d say only 5% of my friends have social networking accounts.
Facebook is probably worth MUCH less than MySpace or YouTube.
It would be nice if Google purchases the Facebook since Orkut is just plain ugly and useless, but I don’t think they HAVE to buy it. Now that they have YouTube, they can integrate it with Blogger, Orkut, Picasa Web Albums, and various other products to create a bigger social networking product.
As far as innovations and “wow/cool” factors go, Yahoo and Google are doing great. I’m really impressed with Yahoo Mail Beta (although I don’t use it) and docs.google.com as well as Gmail (Gmail needs an interface makeover!).
Robert, I really enjoy reading your blog. Keep bloggin’!
-TK
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I can tell you the effect You Tube has…my martial arts school put a couple of videos up on YouTube…holy CRAP…that’s better than offering a handjob with the uniform.
Absolutely astounding.
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I can tell you the effect You Tube has…my martial arts school put a couple of videos up on YouTube…holy CRAP…that’s better than offering a handjob with the uniform.
Absolutely astounding.
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Microsoft has an engineering culture?
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Microsoft has an engineering culture?
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lol that’s funny Allen Jones. YouTube is currently like the most popular website around these days especially with over 2 billion hits per hr. As far as popularity is concerned, Facebook is getting there i think. The social networking sites are really coming into their own right now, but I don’t think facebook will surpass youtube anytime soon.
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lol that’s funny Allen Jones. YouTube is currently like the most popular website around these days especially with over 2 billion hits per hr. As far as popularity is concerned, Facebook is getting there i think. The social networking sites are really coming into their own right now, but I don’t think facebook will surpass youtube anytime soon.
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“Who cares if Warren Buffet didn’t buy GOOG’s common shares? Many idiots & smart people bought GOOG shares and are doing “fine”. Anyway, it’s probably a good idea to sell GOOG shares now. The shares are obviously overpriced and their P/E ratio is way too high.”
that doesn’t mean anything. Alot of people sunk money into the Web Bubble, Created Billionaires and they couldn’t afford the rent. but who stayed with his shirt on, warren buffet. he has been taught not to get excited by these fades nor buy stock at extraordinary high prices.
the problem with most bloggers or “geeks” is they don’t see the business side of it, they see whats cool and fun.
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“Who cares if Warren Buffet didn’t buy GOOG’s common shares? Many idiots & smart people bought GOOG shares and are doing “fine”. Anyway, it’s probably a good idea to sell GOOG shares now. The shares are obviously overpriced and their P/E ratio is way too high.”
that doesn’t mean anything. Alot of people sunk money into the Web Bubble, Created Billionaires and they couldn’t afford the rent. but who stayed with his shirt on, warren buffet. he has been taught not to get excited by these fades nor buy stock at extraordinary high prices.
the problem with most bloggers or “geeks” is they don’t see the business side of it, they see whats cool and fun.
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Yeah, I agree. YouTube has such more to offer. Facebook only deals with will a little bubble of kids. I think for Facebook to be competive with YouTube It needs a way for them to stop losing there audience after college. But, I think social-networking is just a fad. Like Po-go sticks.
Young adult’s will be turned away from it soon enough because it’s trendy. I was reading an article today about how youth are starting to cancel there MySpace accounts because the people they met online never become real friends.
http://officedoodles.wordpress.com
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Yeah, I agree. YouTube has such more to offer. Facebook only deals with will a little bubble of kids. I think for Facebook to be competive with YouTube It needs a way for them to stop losing there audience after college. But, I think social-networking is just a fad. Like Po-go sticks.
Young adult’s will be turned away from it soon enough because it’s trendy. I was reading an article today about how youth are starting to cancel there MySpace accounts because the people they met online never become real friends.
http://officedoodles.wordpress.com
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Walk into a Bank, tell them you want to buy Facebook.com and see how much money they’ll let you borrow…
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Walk into a Bank, tell them you want to buy Facebook.com and see how much money they’ll let you borrow…
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lol paul
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lol paul
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Ditto what officedoodles stated. I cancelled my facebook account last week actually. I’ll be doing the same with Myspace in a month or so. I actually find Myspace more useful than Facebook at the moment. After my freshman year, I rarely used facebook anymore. It’s a great service to meet and greet before you attend college or when you just get there but after that, it’s only purpose seems to be to find out who’s your roomate, who has your class, or who’s birthday is coming up.
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Ditto what officedoodles stated. I cancelled my facebook account last week actually. I’ll be doing the same with Myspace in a month or so. I actually find Myspace more useful than Facebook at the moment. After my freshman year, I rarely used facebook anymore. It’s a great service to meet and greet before you attend college or when you just get there but after that, it’s only purpose seems to be to find out who’s your roomate, who has your class, or who’s birthday is coming up.
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Robert, you’re spot on in your analysis that Microsoft needs to stop its modern “we can build something better” culture and get back into the philosophy (Gates philosophy instead of Ballmer’s?) of identifying the best in the industry, buying it, and absorbing it into the fold.
For Microsoft to keep trying with its own reinventions, without even doing much in the way of significant innovation, is folly of the worst sort.
ps: Google Mail failed? That’s news to me. They have a bigger plan than just competing with Hotmail and you can glimpse it with the private-branded Google suite that companies can – and are – installing on their own networks.
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Robert, you’re spot on in your analysis that Microsoft needs to stop its modern “we can build something better” culture and get back into the philosophy (Gates philosophy instead of Ballmer’s?) of identifying the best in the industry, buying it, and absorbing it into the fold.
For Microsoft to keep trying with its own reinventions, without even doing much in the way of significant innovation, is folly of the worst sort.
ps: Google Mail failed? That’s news to me. They have a bigger plan than just competing with Hotmail and you can glimpse it with the private-branded Google suite that companies can – and are – installing on their own networks.
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Warren Buffett doesn’t buy any tech stuff because he doesn’t understand it. That’s cool with me. He understands how to buy coal and copper and other kinds of commodity companies. I don’t understand what drives those. I live in tech. And, if you live in tech then you gotta understand that social software is driving the tech consumer markets right now.
Paul: remember where I work during the day: USVP and VenRock. That’s a bank. And they are willing to spend quite a bit to bankroll social software right now.
You might take a look at who’s behind both of those companies. They are the ultimate “bank”.
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Social networking is not a fad. It is here to stay. In fact, it is still in it’s beginning stages. Steve Ballmer is killing Microsoft with his outdated views of technology (oh yeah, he lives in Washington, go figure). eBay has already made it’s money back with Skype, it opened up the international market for PayPal and eBay for them.
Also, everyone is running around saying that these social networking sites are being “over valued”. Well this is what I’d have to say: Facebook is worth much, much more than Myspace. It targets a niche market (high school and college), has amazing technology, and has up to date profiles of nearly all it’s users. This is what advertisers watn; specific demographics to target. Perfect. And that’s why a Facebook is worth much more than Myspace.
No, we’re not in a bubble. We’re just entering a boom. Boom 2.0… Get on board before it’s too late, you bunch of haters.
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Warren Buffett doesn’t buy any tech stuff because he doesn’t understand it. That’s cool with me. He understands how to buy coal and copper and other kinds of commodity companies. I don’t understand what drives those. I live in tech. And, if you live in tech then you gotta understand that social software is driving the tech consumer markets right now.
Paul: remember where I work during the day: USVP and VenRock. That’s a bank. And they are willing to spend quite a bit to bankroll social software right now.
You might take a look at who’s behind both of those companies. They are the ultimate “bank”.
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Social networking is not a fad. It is here to stay. In fact, it is still in it’s beginning stages. Steve Ballmer is killing Microsoft with his outdated views of technology (oh yeah, he lives in Washington, go figure). eBay has already made it’s money back with Skype, it opened up the international market for PayPal and eBay for them.
Also, everyone is running around saying that these social networking sites are being “over valued”. Well this is what I’d have to say: Facebook is worth much, much more than Myspace. It targets a niche market (high school and college), has amazing technology, and has up to date profiles of nearly all it’s users. This is what advertisers watn; specific demographics to target. Perfect. And that’s why a Facebook is worth much more than Myspace.
No, we’re not in a bubble. We’re just entering a boom. Boom 2.0… Get on board before it’s too late, you bunch of haters.
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It the same old story when Fox bought MySpace people couldn’t understand why. It’s all about advertising and the distribution network MySpace created for Fox. The same goes for the Google/YouTube venture. People thought Murdoch was crazy, a year or so later he inked a deal with Google for $900m, more than paying for his initial investment. Who’s crazy now?
In terms of Microsoft being able to build YouTube and make it as popular, well they might be able to. MSN Spaces is extremely popular however, I don’t think it’ll ever top MySpace and the reason why, it’s branded Microsoft. YouTube, Flickr, MySpace, FaceBook, etc. all have the advantage of being the “cool” startup. The publics see’s them as starting up in the garage and thus supports them.
Robert, do you think Flickr would have been as popular as it is now if Yahoo had dumped the Flickr name and branded it as Yahoo?
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Bat: what does Ballmer’s worth have to do with ANYTHING?
Remember 1977? I know a couple of teenagers who were worth shit back then. Even had to sell their calculator and van to get their company rolling. All the guys with “big worth” thought their idea was stupid.
Anyone who thinks that someone who is rich will always make the right decisions is stupid in my book.
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This guy digitaltiger is an idiot… Before you post another comment, go get a valid source in Silicon Valley to back you up. You won’t find anyone… Where are you from ? Redmond ??
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It the same old story when Fox bought MySpace people couldn’t understand why. It’s all about advertising and the distribution network MySpace created for Fox. The same goes for the Google/YouTube venture. People thought Murdoch was crazy, a year or so later he inked a deal with Google for $900m, more than paying for his initial investment. Who’s crazy now?
In terms of Microsoft being able to build YouTube and make it as popular, well they might be able to. MSN Spaces is extremely popular however, I don’t think it’ll ever top MySpace and the reason why, it’s branded Microsoft. YouTube, Flickr, MySpace, FaceBook, etc. all have the advantage of being the “cool” startup. The publics see’s them as starting up in the garage and thus supports them.
Robert, do you think Flickr would have been as popular as it is now if Yahoo had dumped the Flickr name and branded it as Yahoo?
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Bat: what does Ballmer’s worth have to do with ANYTHING?
Remember 1977? I know a couple of teenagers who were worth shit back then. Even had to sell their calculator and van to get their company rolling. All the guys with “big worth” thought their idea was stupid.
Anyone who thinks that someone who is rich will always make the right decisions is stupid in my book.
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This guy digitaltiger is an idiot… Before you post another comment, go get a valid source in Silicon Valley to back you up. You won’t find anyone… Where are you from ? Redmond ??
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Paul: MSN Spaces is NOT very popular. There are 75 million spaces, but only about 125 million visitors. That means each space is only visited by one or two people. That’s not the definition of popular in my book. And, how did they get to 75 million spaces? Oh, yeah, they had 200 million MSN Messenger users that they leveraged.
Regarding Flickr. No, if Yahoo had dumped the Flickr name they would have given up one of the great brands of the modern age. Luckily smart people work at Yahoo (I met with some today). Yeah, their business overall isn’t doing all that well, but the smartest thing they did was buy Flickr. Let’s meet in 10 years and see how that brand worked out.
On the other hand, Stewart and Caterina have to be kicking themselves for selling too soon. They only got $30 million. If they could have survived on their own for a few more years they probably would have gotten $750 million, or maybe more.
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Paul: MSN Spaces is NOT very popular. There are 75 million spaces, but only about 125 million visitors. That means each space is only visited by one or two people. That’s not the definition of popular in my book. And, how did they get to 75 million spaces? Oh, yeah, they had 200 million MSN Messenger users that they leveraged.
Regarding Flickr. No, if Yahoo had dumped the Flickr name they would have given up one of the great brands of the modern age. Luckily smart people work at Yahoo (I met with some today). Yeah, their business overall isn’t doing all that well, but the smartest thing they did was buy Flickr. Let’s meet in 10 years and see how that brand worked out.
On the other hand, Stewart and Caterina have to be kicking themselves for selling too soon. They only got $30 million. If they could have survived on their own for a few more years they probably would have gotten $750 million, or maybe more.
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Robert, good point. I agree with your views on MSN Spaces, I guess when I said “popular” I really meant “they have a lot of spaces” haha.
So what now for Microsoft. The biggest social sites are getting snapped up.. do they continue building their own stuff or wait for the next big thing?
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Robert, good point. I agree with your views on MSN Spaces, I guess when I said “popular” I really meant “they have a lot of spaces” haha.
So what now for Microsoft. The biggest social sites are getting snapped up.. do they continue building their own stuff or wait for the next big thing?
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Paul: well, clearly Microsoft’s executives don’t think these things are worth the price. So, if you think that, then your strategy is “clone, baby, clone.”
That ain’t gonna work. But they don’t listen to me.
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Paul: well, clearly Microsoft’s executives don’t think these things are worth the price. So, if you think that, then your strategy is “clone, baby, clone.”
That ain’t gonna work. But they don’t listen to me.
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Warren Buffett doesn’t buy any tech stuff because he doesn’t understand it.
Sure. Because his definition of technology is slightly different than yours.
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Warren Buffett doesn’t buy any tech stuff because he doesn’t understand it.
Sure. Because his definition of technology is slightly different than yours.
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Ballmer, look left! Google Office (docs.google.com)
This is just a joke to compare MS Office with some web office package containing a very limited feature set.
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Ballmer, look left! Google Office (docs.google.com)
This is just a joke to compare MS Office with some web office package containing a very limited feature set.
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Scoble I see you conveiently overlooked offering us your vast insight and knowledge on the REASONS Ballmer was asking that question. Did you even READ the whole article, or simply scan the first two sentences and think you groked it? Here, let me help you. For example:
“Is YouTube really some permanent, long-term thing, or is it a fashion? I’m not saying it is a fashion. But every time we do valuations, I wonder if we can afford to keep this hot for 10 years. I’m sure somebody at Google has got to do the same analysis, because even $1.6 billion is more than 1% of their market cap.”
so, what is your analysis of that, oh wise one? And please answer with supporting data that leads you to your conclusion….
“Is there a business model? Right now, there’s no business model for YouTube that would justify $1.6 billion. And what about the rights holders? At the end of the day, a lot of the content that’s up there is owned by somebody else.”
Answer with supporting data, please.
“The truth is what Google is doing now is transferring the wealth out of the hands of rights holders into Google. So media companies around the world are all threatened by Google. Why? Because basically Google is telling you how much of your ad revenue you get to keep.They better get some competition. Us. Yahoo! (YHOO). Somebody better break through or you can short all media stocks right now. As long as there are two, you can hold onto media stocks. Google understands that. And that’s one reason why they’re willing to lose money up front. Just look at some of these deals. That MySpace deal (where Google provides the ad engine for MySpace). We bid a lot of money on that MySpace deal. And we got outbid. We wanted to win that MySpace (NWS) deal. At some point, we said we can’t do this. Now Google can afford to spend more than us and Yahoo because they have more people in their ad system, so they’re getting better yield, effectively.”
Agree or disagree? Please explain with supporting data.
Did you miss the part where Ballmer said he MIGHT pay 1.6B for YouTube? Or did you choose to overlook that because doing so allows you to think you appear to be smarter than Ballmer?
If you are going to pretend to know what you are talking about, at least have the intellectual honesty to either admit you only read the first two sentences or READ THE WHOLE ARTICLE. It’s apparent from this post you only did the former. Or if you did the latter, Ballmer lost you after the first paragraph.
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Scoble I see you conveiently overlooked offering us your vast insight and knowledge on the REASONS Ballmer was asking that question. Did you even READ the whole article, or simply scan the first two sentences and think you groked it? Here, let me help you. For example:
“Is YouTube really some permanent, long-term thing, or is it a fashion? I’m not saying it is a fashion. But every time we do valuations, I wonder if we can afford to keep this hot for 10 years. I’m sure somebody at Google has got to do the same analysis, because even $1.6 billion is more than 1% of their market cap.”
so, what is your analysis of that, oh wise one? And please answer with supporting data that leads you to your conclusion….
“Is there a business model? Right now, there’s no business model for YouTube that would justify $1.6 billion. And what about the rights holders? At the end of the day, a lot of the content that’s up there is owned by somebody else.”
Answer with supporting data, please.
“The truth is what Google is doing now is transferring the wealth out of the hands of rights holders into Google. So media companies around the world are all threatened by Google. Why? Because basically Google is telling you how much of your ad revenue you get to keep.They better get some competition. Us. Yahoo! (YHOO). Somebody better break through or you can short all media stocks right now. As long as there are two, you can hold onto media stocks. Google understands that. And that’s one reason why they’re willing to lose money up front. Just look at some of these deals. That MySpace deal (where Google provides the ad engine for MySpace). We bid a lot of money on that MySpace deal. And we got outbid. We wanted to win that MySpace (NWS) deal. At some point, we said we can’t do this. Now Google can afford to spend more than us and Yahoo because they have more people in their ad system, so they’re getting better yield, effectively.”
Agree or disagree? Please explain with supporting data.
Did you miss the part where Ballmer said he MIGHT pay 1.6B for YouTube? Or did you choose to overlook that because doing so allows you to think you appear to be smarter than Ballmer?
If you are going to pretend to know what you are talking about, at least have the intellectual honesty to either admit you only read the first two sentences or READ THE WHOLE ARTICLE. It’s apparent from this post you only did the former. Or if you did the latter, Ballmer lost you after the first paragraph.
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BTW, the latest rumor is that Google is going to buy FaceBook for 2.3 billion.
Yahoo is talking to them based on WSJ. Since I’m not Yahoo shareholder I don’t care.
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BTW, the latest rumor is that Google is going to buy FaceBook for 2.3 billion.
Yahoo is talking to them based on WSJ. Since I’m not Yahoo shareholder I don’t care.
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There’s no “WOW” or “COOL” factors associated with any of their products.
That’s right. Who cares about the business model – we need WOW now!
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There’s no “WOW” or “COOL” factors associated with any of their products.
That’s right. Who cares about the business model – we need WOW now!
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I for one think that Microsoft is in a fantastic position to launch their own social system. Xbox Live anywhere perhaps? I seriously doubt that Microsoft is going to invest that much money to bring Xbox live to so many different devices just to play games. They are building a community, and building it quickly, especially with the help of major fumbles by sony. When you think about it, Xbox live anywhere is set to become a ubiquitous communication platform, that follows you no matter where you go. Can facebook or youtube say that? Plus it already has the built in communications, friend lists and soon, user generated content. There is no doubt in my mind that anywhere integration is going to be integrated into most Microsoft products, like Zune and Media Center and Windows Mobile. Microsoft already has the userbase, and is building the technology, they just need to bring it all together.
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I for one think that Microsoft is in a fantastic position to launch their own social system. Xbox Live anywhere perhaps? I seriously doubt that Microsoft is going to invest that much money to bring Xbox live to so many different devices just to play games. They are building a community, and building it quickly, especially with the help of major fumbles by sony. When you think about it, Xbox live anywhere is set to become a ubiquitous communication platform, that follows you no matter where you go. Can facebook or youtube say that? Plus it already has the built in communications, friend lists and soon, user generated content. There is no doubt in my mind that anywhere integration is going to be integrated into most Microsoft products, like Zune and Media Center and Windows Mobile. Microsoft already has the userbase, and is building the technology, they just need to bring it all together.
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The social networking sites are really coming into their own right now, but I don’t think facebook will surpass youtube anytime soon.
Give it year or two and you will not even remeber the names of the social networking sites.
it happened once and it will happen again.
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The social networking sites are really coming into their own right now, but I don’t think facebook will surpass youtube anytime soon.
Give it year or two and you will not even remeber the names of the social networking sites.
it happened once and it will happen again.
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No, we’re not in a bubble. We’re just entering a boom. Boom 2.0… Get on board before it’s too late, you bunch of haters.
I will be late this time. I learnt my lesson.
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No, we’re not in a bubble. We’re just entering a boom. Boom 2.0… Get on board before it’s too late, you bunch of haters.
I will be late this time. I learnt my lesson.
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http://daviddalka.com/createvalue/2006/10/12/just-where-is-steven-berkowitz/
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http://daviddalka.com/createvalue/2006/10/12/just-where-is-steven-berkowitz/
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“Ballmer, look left! Google Office (docs.google.com)
This is just a joke to compare MS Office with some web office package containing a very limited feature set. ”
That’s the whole point. For the price and the bloat the over-sized Office is not worth it. Lightweight, on the web, accessible from anywhere office apps.
Personally, I don’t need MS Office anymore. I don’t buy in to the continual upgrade cycle that is MS Office. A free, online, evolving set of apps is what I like. And once Google integrate their apps more closely, that will be the killer. As for the comment that GMail failed. Ahh, you either haven’t used it or you just don’t get it.
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“Ballmer, look left! Google Office (docs.google.com)
This is just a joke to compare MS Office with some web office package containing a very limited feature set. ”
That’s the whole point. For the price and the bloat the over-sized Office is not worth it. Lightweight, on the web, accessible from anywhere office apps.
Personally, I don’t need MS Office anymore. I don’t buy in to the continual upgrade cycle that is MS Office. A free, online, evolving set of apps is what I like. And once Google integrate their apps more closely, that will be the killer. As for the comment that GMail failed. Ahh, you either haven’t used it or you just don’t get it.
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The community (such as it exists and rememeber the commenters are a very small active subsection of the users) is built around a certain experience – if moentisation alters that experience then the community will dissipate – especially as you suggest that the technology is replicable. [Incidentally, as a non-techie, I don’t understand your $100 million cost estimation given that YouTube have not had that amount of money to hand].
The eyeball argument may have validity, but as a marketer I would suggest that the state of the eyeballs is key and I’m not convinced that the eyes of social software are seeking advertising messages, especially if, as you argue, YouTube is about putting up videos rather than watching them. On the other hand, if advertisers believe in it then the revenue will flow even if it’s being wasted.
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The community (such as it exists and rememeber the commenters are a very small active subsection of the users) is built around a certain experience – if moentisation alters that experience then the community will dissipate – especially as you suggest that the technology is replicable. [Incidentally, as a non-techie, I don’t understand your $100 million cost estimation given that YouTube have not had that amount of money to hand].
The eyeball argument may have validity, but as a marketer I would suggest that the state of the eyeballs is key and I’m not convinced that the eyes of social software are seeking advertising messages, especially if, as you argue, YouTube is about putting up videos rather than watching them. On the other hand, if advertisers believe in it then the revenue will flow even if it’s being wasted.
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“Doing the technology is fairly straightforward. I’m sure that could be built for $100 million or less. Probably far less if they really are smart about how they go about it.”
Don’t get why you speculate about this. YouTube did it – and everything else – for under $10M, more or less. So why would someone have to be “really smart” to build the tech for under $100M?
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“Doing the technology is fairly straightforward. I’m sure that could be built for $100 million or less. Probably far less if they really are smart about how they go about it.”
Don’t get why you speculate about this. YouTube did it – and everything else – for under $10M, more or less. So why would someone have to be “really smart” to build the tech for under $100M?
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I agree with LayZ that you did not read the whole article. Serves you right when he flames you every time.
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I agree with LayZ that you did not read the whole article. Serves you right when he flames you every time.
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Robert, this is one of your posts where it’s clear that you didn’t bother reading the whole article. You have a habbit of taking Ballmer’s words out of context, twisting them, and then trashing him to make you look smart and him look dumb. Read the entire article before trashing someone again.
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Robert, this is one of your posts where it’s clear that you didn’t bother reading the whole article. You have a habbit of taking Ballmer’s words out of context, twisting them, and then trashing him to make you look smart and him look dumb. Read the entire article before trashing someone again.
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A few comments:
(1) “The thing is, YouTube is two SEPARATE things: 1) the technology. 2) the community/brand.”
Right on both counts Robert. But you forgot a third one – YouTube is WAY overpriced at $1.6 billion.
(2) “Paul: MSN Spaces is NOT very popular. There are 75 million spaces, but only about 125 million visitors. That means each space is only visited by one or two people. That’s not the definition of popular in my book.”
Wow, Robert. This sounds like you turned 180 degrees on this over the last few months. Is it coincidental that when you touted how many blogs were there you were working for MS?
(3) “Social networking is not a fad. It is here to stay. In fact, it is still in it’s beginning stages.”
Now, I’m betting many said the exact same thing about the internet back in the late 90s. They were right too – it isn’t a fad and it still exists. Too bad that didn’t stop the bubble from bursting. More and more the smell coming from the Valley anymore reminds me of the late 90s again.
(4) “Personally, I don’t need MS Office anymore. I don’t buy in to the continual upgrade cycle that is MS Office. A free, online, evolving set of apps is what I like. And once Google integrate their apps more closely, that will be the killer. As for the comment that GMail failed.”
So many things to comment on here. The use of personally instead of professionally. Just like Macs and Linux have a long way to go to catch up to the marketshare/mindshare Windows has, so does Google in the Office space.
Continuous Office upgrade cycle? GMail a success? The way you phrase it – I agree. But now let’s talk in terms of bringing in new profits TODAY… both are tough business cases.
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A few comments:
(1) “The thing is, YouTube is two SEPARATE things: 1) the technology. 2) the community/brand.”
Right on both counts Robert. But you forgot a third one – YouTube is WAY overpriced at $1.6 billion.
(2) “Paul: MSN Spaces is NOT very popular. There are 75 million spaces, but only about 125 million visitors. That means each space is only visited by one or two people. That’s not the definition of popular in my book.”
Wow, Robert. This sounds like you turned 180 degrees on this over the last few months. Is it coincidental that when you touted how many blogs were there you were working for MS?
(3) “Social networking is not a fad. It is here to stay. In fact, it is still in it’s beginning stages.”
Now, I’m betting many said the exact same thing about the internet back in the late 90s. They were right too – it isn’t a fad and it still exists. Too bad that didn’t stop the bubble from bursting. More and more the smell coming from the Valley anymore reminds me of the late 90s again.
(4) “Personally, I don’t need MS Office anymore. I don’t buy in to the continual upgrade cycle that is MS Office. A free, online, evolving set of apps is what I like. And once Google integrate their apps more closely, that will be the killer. As for the comment that GMail failed.”
So many things to comment on here. The use of personally instead of professionally. Just like Macs and Linux have a long way to go to catch up to the marketshare/mindshare Windows has, so does Google in the Office space.
Continuous Office upgrade cycle? GMail a success? The way you phrase it – I agree. But now let’s talk in terms of bringing in new profits TODAY… both are tough business cases.
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Robert, what is the next big thing? I believe it’s called education on demand. Who could build the Education 2.0 platform? Academic education doesn’t work well. It’s boring, it’s antiquated, it should be fixed. There is a huge market all over the world.
Wikipedia + blogs + Facebook (social networks) + podcasting + videocasting + Flickr + mobile (cell) phones + gaming + IM + VoIP = Education 2.0
“Rather than spending 4 years of your life taking a bunch of courses that may or may not really matter in your life once you graduate, you can choose your education on an ‘as needed basis,’ based on your unique interests and talents.”
http://ben.casnocha.com/2006/09/college_admissi_1.html
Is Podtech.net interested in this idea?
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Robert, what is the next big thing? I believe it’s called education on demand. Who could build the Education 2.0 platform? Academic education doesn’t work well. It’s boring, it’s antiquated, it should be fixed. There is a huge market all over the world.
Wikipedia + blogs + Facebook (social networks) + podcasting + videocasting + Flickr + mobile (cell) phones + gaming + IM + VoIP = Education 2.0
“Rather than spending 4 years of your life taking a bunch of courses that may or may not really matter in your life once you graduate, you can choose your education on an ‘as needed basis,’ based on your unique interests and talents.”
http://ben.casnocha.com/2006/09/college_admissi_1.html
Is Podtech.net interested in this idea?
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I think FaceBook is worth MORE than YouTube. I just don’t think YouTube was worth $1.6B. I calculated estimated reveunes and expenses for both FaceBook and YouTube, then applied some earnings multiples to each.
My SWAG analysis values FaceBook at about $700M and YouTube at about $600M. You can see all the numbers and assumptions on my blog post today
http://dondodge.typepad.com/the_next_big_thing/2006/10/facebook_worth_.html
Don Dodge
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I think FaceBook is worth MORE than YouTube. I just don’t think YouTube was worth $1.6B. I calculated estimated reveunes and expenses for both FaceBook and YouTube, then applied some earnings multiples to each.
My SWAG analysis values FaceBook at about $700M and YouTube at about $600M. You can see all the numbers and assumptions on my blog post today
http://dondodge.typepad.com/the_next_big_thing/2006/10/facebook_worth_.html
Don Dodge
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“Doing the technology is fairly straightforward. I’m sure that could be built for $100 million or less. Probably far less if they really are smart about how they go about it.”
How on earth you can estimate that amount? There’s nothing here that can be found or done under 2 or 3 month of work with 3-4 geeks.
99.9M $ in hardware? I have a big doubt here onless you need a HUGE datacenter.
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“Doing the technology is fairly straightforward. I’m sure that could be built for $100 million or less. Probably far less if they really are smart about how they go about it.”
How on earth you can estimate that amount? There’s nothing here that can be found or done under 2 or 3 month of work with 3-4 geeks.
99.9M $ in hardware? I have a big doubt here onless you need a HUGE datacenter.
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You’re right here. I get links to silly YouTube cat vidoes from grandma and other folks over the age of 50. I’ve never received a link from anybody regarding Facebook.
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You’re right here. I get links to silly YouTube cat vidoes from grandma and other folks over the age of 50. I’ve never received a link from anybody regarding Facebook.
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Don; I looked at your numbers and I think the 70% hit on revenues for copyright holders far too conservative. The hit will be much smaller. Future copyright holders will use places like YouTube to leverage the value of their copyright by generating alternative sources of revenue elsewhere from that copyright. If you look around you will already see the tiny beginnings of this business model currently in existence. There are more talented poor copyright holders than there are rich talented copyright holders. In the future the “have not group” are going to become a multitude of “well off” copyright holders allowing their material to be used freely as a matter of sound business strategy. Platforms like YouTube are only the beginning of probably several profitable enablers.
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Don; I looked at your numbers and I think the 70% hit on revenues for copyright holders far too conservative. The hit will be much smaller. Future copyright holders will use places like YouTube to leverage the value of their copyright by generating alternative sources of revenue elsewhere from that copyright. If you look around you will already see the tiny beginnings of this business model currently in existence. There are more talented poor copyright holders than there are rich talented copyright holders. In the future the “have not group” are going to become a multitude of “well off” copyright holders allowing their material to be used freely as a matter of sound business strategy. Platforms like YouTube are only the beginning of probably several profitable enablers.
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Why would Microsoft’s execs listen to your recommendation of “start buying everything that moved in the social software space”? No exec in any industry would listen to that advice. Whether it was a simplified statement in any form, it seems to reflect a lack of deep business sense and your marketing background. What if Microsoft bought Flickr, Upcoming, or delicious? Would their business units be better off than today? Would they generate that much more revenue or even goodwill? I think you sometimes drink too much of the Web2.0 koolaid.
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Why would Microsoft’s execs listen to your recommendation of “start buying everything that moved in the social software space”? No exec in any industry would listen to that advice. Whether it was a simplified statement in any form, it seems to reflect a lack of deep business sense and your marketing background. What if Microsoft bought Flickr, Upcoming, or delicious? Would their business units be better off than today? Would they generate that much more revenue or even goodwill? I think you sometimes drink too much of the Web2.0 koolaid.
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Seems to me it’s true that MS still does not “get” Web 2.0, but it’s not clear that they could do much with all these companies if they owned them.
It’s 98% about the advertising and Google is handily winning all those battles and will continue to win until Yahoo and MS get their asses in gear and bring publishers good contextual advertising.
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Seems to me it’s true that MS still does not “get” Web 2.0, but it’s not clear that they could do much with all these companies if they owned them.
It’s 98% about the advertising and Google is handily winning all those battles and will continue to win until Yahoo and MS get their asses in gear and bring publishers good contextual advertising.
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I see facebook being picked up for at least a Billion within the year. Let’s go Mark!
MindPetals.com
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I see facebook being picked up for at least a Billion within the year. Let’s go Mark!
MindPetals.com
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>Don’t get why you speculate about this. YouTube did it – and everything else – for under $10M, more or less. So why would someone have to be “really smart” to build the tech for under $100M?
Because big companies always spend more than small startups to do the same thing. Also, by the time Microsoft clones YouTube properly, the traffic on both sites will be much larger than it is today.
Chasing other people’s taillights means you gotta spend more than they did to catch up.
How much did Microsoft spend to clone Google (it took, what, eight years?)? Hint: a LOT more than Google spent to build Google.
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>Don’t get why you speculate about this. YouTube did it – and everything else – for under $10M, more or less. So why would someone have to be “really smart” to build the tech for under $100M?
Because big companies always spend more than small startups to do the same thing. Also, by the time Microsoft clones YouTube properly, the traffic on both sites will be much larger than it is today.
Chasing other people’s taillights means you gotta spend more than they did to catch up.
How much did Microsoft spend to clone Google (it took, what, eight years?)? Hint: a LOT more than Google spent to build Google.
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Bernard: >No exec in any industry would listen to that advice.
Which is why we see companies who miss disruptive technologies. The same execs turned down Woz and Jobs when they were showing around their Apple I. That’s OK, you keep talking about “business value.”
I’d rather be on the bleeding edge of user behavior. It’s more dangerous there (you might get cut cause you bet on the wrong technology) but it’s also more fun than being a “suit.”
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Bernard: >No exec in any industry would listen to that advice.
Which is why we see companies who miss disruptive technologies. The same execs turned down Woz and Jobs when they were showing around their Apple I. That’s OK, you keep talking about “business value.”
I’d rather be on the bleeding edge of user behavior. It’s more dangerous there (you might get cut cause you bet on the wrong technology) but it’s also more fun than being a “suit.”
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Personally, I don’t need MS Office anymore. I don’t buy in to the continual upgrade cycle that is MS Office. A free, online, evolving set of apps is what I like.
No, I don’t need evolving web apps – I need real apps I can use in my business now. I don’t want to store my financial statements in spreadsheet somewhere around the web. I don’t want to store my business plans as a text somewhere around the web. And I want to do powerful and fast calculation, graphs and other Excel features. I’m beyond the point of screaming WOOOOOW when I can change a color of cell in some AJAX spreadsheet.
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Personally, I don’t need MS Office anymore. I don’t buy in to the continual upgrade cycle that is MS Office. A free, online, evolving set of apps is what I like.
No, I don’t need evolving web apps – I need real apps I can use in my business now. I don’t want to store my financial statements in spreadsheet somewhere around the web. I don’t want to store my business plans as a text somewhere around the web. And I want to do powerful and fast calculation, graphs and other Excel features. I’m beyond the point of screaming WOOOOOW when I can change a color of cell in some AJAX spreadsheet.
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100 million to build youtube like technology, you got to be kidding…a similar clone can be build for less than 25k even here in america in just a month or so.
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100 million to build youtube like technology, you got to be kidding…a similar clone can be build for less than 25k even here in america in just a month or so.
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Gopi: the fact that you think you can build YouTube for $25,000 shows you are totally clueless about how much it takes to serve out hundreds of millions of videos every day. Absolutely clueless.
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Gopi: the fact that you think you can build YouTube for $25,000 shows you are totally clueless about how much it takes to serve out hundreds of millions of videos every day. Absolutely clueless.
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Jack: Office ain’t going away. I use it a lot too. But, in business, what matters isn’t what is. It’s what will be. It’s the growth that matters. After all, in 1976 the entire computing world looked a lot more like a mainframe than a PC. If you told me “the only computer anyone needs is a mainframe” you would have been ABJECTLY WRONG!!
I’ve already replaced about 40% of my Excel usage with Google Spreadsheets. Why? Cause collaboration is a more important feature to me (since my employees work out of their homes an hour away from me) than pretty graphs.
You’re also assuming Google isn’t working on making Google spreadsheet better. It’s already improved in the few months I’ve been using it.
Does Office improve every few months? Didn’t think so.
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Jack: Office ain’t going away. I use it a lot too. But, in business, what matters isn’t what is. It’s what will be. It’s the growth that matters. After all, in 1976 the entire computing world looked a lot more like a mainframe than a PC. If you told me “the only computer anyone needs is a mainframe” you would have been ABJECTLY WRONG!!
I’ve already replaced about 40% of my Excel usage with Google Spreadsheets. Why? Cause collaboration is a more important feature to me (since my employees work out of their homes an hour away from me) than pretty graphs.
You’re also assuming Google isn’t working on making Google spreadsheet better. It’s already improved in the few months I’ve been using it.
Does Office improve every few months? Didn’t think so.
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“I’ve already replaced about 40% of my Excel usage with Google Spreadsheets. Why? Cause collaboration is a more important feature to me (since my employees work out of their homes an hour away from me) than pretty graphs.”
——————————-
Percentages are nice, but how about some hard numbers. I’m guessing it’s 2 spreadsheets out of 5. Guess what, business have thousands of spreadsheets that they rely on, and sorry, Google’s websheet applet doesn’t get it done.
BTW, there are other web spreadsheets that were around before Google’s lame effort, and they blow Google’s websheet applet away. Why didn’t you convert your spreadsheets to those instead? Oh, the “google” name. Ah, I see.
You need to drink a pot of black coffee to wakeup from the brainwashing that Google put you in. Or get out of Silicon Valley, your perspective has gotten seriously warped since you went there.
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“I’ve already replaced about 40% of my Excel usage with Google Spreadsheets. Why? Cause collaboration is a more important feature to me (since my employees work out of their homes an hour away from me) than pretty graphs.”
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Percentages are nice, but how about some hard numbers. I’m guessing it’s 2 spreadsheets out of 5. Guess what, business have thousands of spreadsheets that they rely on, and sorry, Google’s websheet applet doesn’t get it done.
BTW, there are other web spreadsheets that were around before Google’s lame effort, and they blow Google’s websheet applet away. Why didn’t you convert your spreadsheets to those instead? Oh, the “google” name. Ah, I see.
You need to drink a pot of black coffee to wakeup from the brainwashing that Google put you in. Or get out of Silicon Valley, your perspective has gotten seriously warped since you went there.
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“Wow, Robert. This sounds like you turned 180 degrees on this over the last few months. Is it coincidental that when you touted how many blogs were there you were working for MS?”
—————————
I think you have it wrong. Robert has always trashed MSN Spaces and Live Spaces.
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“Wow, Robert. This sounds like you turned 180 degrees on this over the last few months. Is it coincidental that when you touted how many blogs were there you were working for MS?”
—————————
I think you have it wrong. Robert has always trashed MSN Spaces and Live Spaces.
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Braveheart: why don’t you link to some of those Web spreadsheets that blow Google’s away?
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Braveheart: why don’t you link to some of those Web spreadsheets that blow Google’s away?
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Bat is right. I trashed it on the first day it was out. Didn’t stop them from getting 75 million spaces in about two years. Of course they had an advantage: 200 million existing users of MSN Messenger that they put a new icon in front of.
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Robert,
Facebook may have more leverage with the way their page view numbers have been looking in the last month. If you’re interested, I wrote about that this morning at Inside Facebook (http://www.insidefacebook.com).
-Justin
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Bat is right. I trashed it on the first day it was out. Didn’t stop them from getting 75 million spaces in about two years. Of course they had an advantage: 200 million existing users of MSN Messenger that they put a new icon in front of.
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Robert,
Facebook may have more leverage with the way their page view numbers have been looking in the last month. If you’re interested, I wrote about that this morning at Inside Facebook (http://www.insidefacebook.com).
-Justin
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That’s a great post, Robert. I agree completely.
It’s amazing to me how technology companies still assume they know how to reach audiences, just because they can create tools and software. Nothing has really changed since the 80’s then? “If I can create this utility that lots of people use, then (fill in the blanks)”
We’re living in a media-rich environment! Video and music is becoming more and more connected to the internet. I hate to burst anyone’s bubble, but bein’ the “King of Search” will only get you SO FAR. Google knows that. They know that the advertising money ORIGINATED in television, radio and print, and most of it still remains there –
http://www.vss.com/pubs/pubs_cif_highlights.html
So google is going after content. That’s practically a no-brainer.
Why is it so difficult for technology companies to make this transition? a) they think they know better, b) they don’t understand how to maximize revenue streams of copyrighted material (i.e. work with music companies and studios and networks), and c) they don’t know how to acquire/create video/music content which audiences want to see.
That’s why I still think it’s the networks and studios that will soon grab a significant presence in online content. They are aligned with print and internet media. They’re developing online strategies to transition their content to the web. AND they’re committed to not losing a SINGLE PENNY of their advertising dollars in the process. Why do you think after every LOST episode, there’s a link to ABC.com for their American Express promotion?
Now, I’m not suggesting that technology companies suddenly get into the TV business…but the conceit that there are “no lessons” to be learned from the TV/movie content development/acquisition/distribution business is ludicrous.
Companies like Microsoft will continue to live in a bubble, while while the advertising dollars flow in the opposite direction. It’s as simple as that.
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That’s a great post, Robert. I agree completely.
It’s amazing to me how technology companies still assume they know how to reach audiences, just because they can create tools and software. Nothing has really changed since the 80’s then? “If I can create this utility that lots of people use, then (fill in the blanks)”
We’re living in a media-rich environment! Video and music is becoming more and more connected to the internet. I hate to burst anyone’s bubble, but bein’ the “King of Search” will only get you SO FAR. Google knows that. They know that the advertising money ORIGINATED in television, radio and print, and most of it still remains there –
http://www.vss.com/pubs/pubs_cif_highlights.html
So google is going after content. That’s practically a no-brainer.
Why is it so difficult for technology companies to make this transition? a) they think they know better, b) they don’t understand how to maximize revenue streams of copyrighted material (i.e. work with music companies and studios and networks), and c) they don’t know how to acquire/create video/music content which audiences want to see.
That’s why I still think it’s the networks and studios that will soon grab a significant presence in online content. They are aligned with print and internet media. They’re developing online strategies to transition their content to the web. AND they’re committed to not losing a SINGLE PENNY of their advertising dollars in the process. Why do you think after every LOST episode, there’s a link to ABC.com for their American Express promotion?
Now, I’m not suggesting that technology companies suddenly get into the TV business…but the conceit that there are “no lessons” to be learned from the TV/movie content development/acquisition/distribution business is ludicrous.
Companies like Microsoft will continue to live in a bubble, while while the advertising dollars flow in the opposite direction. It’s as simple as that.
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Robert thanks for the interesting insight over at my blog where you ask “Tell me, is the $3 million for a minute of Superbowl ad time worth it?”
The answer of course is no, it’s not at all. There are exceptions but look at how poorly many of the bubble dot coms did despite major TV exposure.
The Video Advertising emperor has some clothes, but they are cheap clothes, and those are not 1.6 billion dollar shoes he’s wearing.
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Robert thanks for the interesting insight over at my blog where you ask “Tell me, is the $3 million for a minute of Superbowl ad time worth it?”
The answer of course is no, it’s not at all. There are exceptions but look at how poorly many of the bubble dot coms did despite major TV exposure.
The Video Advertising emperor has some clothes, but they are cheap clothes, and those are not 1.6 billion dollar shoes he’s wearing.
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I’m not speaking in terms of “all” and “every” that you were. Acquisitions have to be grounded in terms of value whether long-term or short-term. While I might question the pricing of YouTube, I agree with the strategic and business decisions behind it. I believe in the long-term growth of online video advertising and the strength of YouTube’s community. I still question some acquisitions, such as Upcoming.org or Skype, for their long-term value to Yahoo, eBay, and others.
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I’m not speaking in terms of “all” and “every” that you were. Acquisitions have to be grounded in terms of value whether long-term or short-term. While I might question the pricing of YouTube, I agree with the strategic and business decisions behind it. I believe in the long-term growth of online video advertising and the strength of YouTube’s community. I still question some acquisitions, such as Upcoming.org or Skype, for their long-term value to Yahoo, eBay, and others.
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OK, if you are right (and I think you are) about Google building a moat to protect their ad empire then do you agree they’ll wind up with Facebook as well as Youtube?
http://joeduck.wordpress.com/2006/10/12/prediction-google-will-buy-facebook-for-about-11-billion/
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OK, if you are right (and I think you are) about Google building a moat to protect their ad empire then do you agree they’ll wind up with Facebook as well as Youtube?
http://joeduck.wordpress.com/2006/10/12/prediction-google-will-buy-facebook-for-about-11-billion/
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@55… “I’d rather be on the bleeding edge of user behavior. It’s more dangerous there (you might get cut cause you bet on the wrong technology) but it’s also more fun than being a “suit.””
God! you get more clueless by the post. No wonder the execs at MS never listened to you. You realize it’s not YOUR money you would be spending, right? So you better be goddamned certain you’ve done your homework can justify spending THEIR money on bleeding edge technology. Again, with such an irresponsible position it’s a wonder anyone paid any attention to you at Microsoft. There are “suits” for a reason. They are usually the ones with the brains for smart business decisions. So, please! Continue to refuse to wear a suit. If fits your description well.
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@55… “I’d rather be on the bleeding edge of user behavior. It’s more dangerous there (you might get cut cause you bet on the wrong technology) but it’s also more fun than being a “suit.””
God! you get more clueless by the post. No wonder the execs at MS never listened to you. You realize it’s not YOUR money you would be spending, right? So you better be goddamned certain you’ve done your homework can justify spending THEIR money on bleeding edge technology. Again, with such an irresponsible position it’s a wonder anyone paid any attention to you at Microsoft. There are “suits” for a reason. They are usually the ones with the brains for smart business decisions. So, please! Continue to refuse to wear a suit. If fits your description well.
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YouTube’s technology could be built for “$100m or less”? Talk about an overestimate. Try $10m or less, tops.
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YouTube’s technology could be built for “$100m or less”? Talk about an overestimate. Try $10m or less, tops.
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I’m curious to see if Google can monetize YouTube traffic w/o alienating the user base. If they manage to do this, the deal might pan out. At the very least they’ll be able to serve text-based contextual ads which is a primary revenue driver for them right now. Since advertisers can choose to do this on a CPM basis through site-targeting (rather than CPC basis), even if YouTube users don’t click, advertisers will flock to build ads specifically for YouTube. Don’t forget Google also serves image and video ads. Perhaps they’ll embed video ads directly into the uploaded videos? I think that’s questionable.
I’m wondering if Google will create a system which serves up “related” video content that are ads. If users have the choice to click on them and can post text or video comments, they might choose to watch the videos. This, in turn, would keep the ad content creators on their toes and might lead to some really good content in ads that are treated almost like existing related videos. This could help advertisers’ videos go viral and the whole deal might turn out to be a huge success.
OTOH, if YouTube users feel that ads are being stuffed in their faces, they’ll find another video-sharing site to use. Short term, I doubt we’ll see many changes on the front end. Google will probably tackle scaling the backend systems first. But, hey, money saved is money earned.
Two other thoughts:
1) YouTube beat the pants off Google, Yahoo! and Microsoft. Don’t you think you’d want to hire these guys? How much are the people themselves worth?
2) If Google can somehow insert its brand into the YouTube experience w/o damaging the existing YouTube brand, they might get existing YouTube users to use other Google products. IOW, they’re buying potential ad revenue beyond the YouTube platform. What’s that worth?
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I’m curious to see if Google can monetize YouTube traffic w/o alienating the user base. If they manage to do this, the deal might pan out. At the very least they’ll be able to serve text-based contextual ads which is a primary revenue driver for them right now. Since advertisers can choose to do this on a CPM basis through site-targeting (rather than CPC basis), even if YouTube users don’t click, advertisers will flock to build ads specifically for YouTube. Don’t forget Google also serves image and video ads. Perhaps they’ll embed video ads directly into the uploaded videos? I think that’s questionable.
I’m wondering if Google will create a system which serves up “related” video content that are ads. If users have the choice to click on them and can post text or video comments, they might choose to watch the videos. This, in turn, would keep the ad content creators on their toes and might lead to some really good content in ads that are treated almost like existing related videos. This could help advertisers’ videos go viral and the whole deal might turn out to be a huge success.
OTOH, if YouTube users feel that ads are being stuffed in their faces, they’ll find another video-sharing site to use. Short term, I doubt we’ll see many changes on the front end. Google will probably tackle scaling the backend systems first. But, hey, money saved is money earned.
Two other thoughts:
1) YouTube beat the pants off Google, Yahoo! and Microsoft. Don’t you think you’d want to hire these guys? How much are the people themselves worth?
2) If Google can somehow insert its brand into the YouTube experience w/o damaging the existing YouTube brand, they might get existing YouTube users to use other Google products. IOW, they’re buying potential ad revenue beyond the YouTube platform. What’s that worth?
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robert, can we have a small graph of your website hits over the past week?? lol whenever it goes down you come out with a microsoft bashing post and only whenever you do such stuff do you have so many replies and ppl bother reading it.
1) You have not read the full article of balmer.
2) “Braveheart: why don’t you link to some of those Web spreadsheets that blow Google’s away? ”
Funny I wonder how on earth can you talk like a big web 2.0 guy when you dont have knowledge on this. Zoho suite makes google bite the dust.
3) “I’ve already replaced about 40% of my Excel usage with Google Spreadsheets. Why? Cause collaboration is a more important feature to me (since my employees work out of their homes an hour away from me) than pretty graphs.”
The first motive obviously is your company does not earn so much profit to give you all one. Second, you dont do a lot of excel stuff. A sheet with 10-20 rows is not what we are talking about. Most people who is excel use it for complex analysis. Reg. collaboration have you ever heard something about sharepoint???
4) ” Why we love YouTube isn’t cause we can watch other people’s videos. It’s cause we can upload our own lame videos!!!”
Again dont generalize with a “we”. I can assure that a lot of ppl i know have never uploaded even a single video into youtube. We go there to watch some movies (lol you get them in 7-8 parts), or to watch jon stewart. I am sure 90% of youtube users go there to watch videos. Well I can prove it by the simple fact that there are so many visitors every day, but the percentage of videos uploaded (that to personal lame videos”) is very very less.
5) “Back to Facebook. Is it worth as much as YouTube? I don’t think so because only college students associate with that brand. With YouTube everyone from 80-year-old friends to my son were using it and talking about it. Facebook is struggling to make its brand interesting to non college students. So far it has failed, which is why I don’t think it’s worth as much as YouTube”
Well facebook might be one of those long term shots worth a try. I am sure these college students would still like to keep in contact with their friends once outside school.
6) Reg. myspace. It has survived so long inspite of all the child predators and threats by sentors to ban it from schools…the reason Fox the mother company is a bush spokesman. Well a ban on myspace once a democratic senate or president comes will burst the myspace bubble…Hint: Remember how the stock market for online gambling companies fell??
7) “Warren Buffett doesn’t buy any tech stuff because he doesn’t understand it.”..
That is exactly what makes him a perfect intelligent businessman. I am sure that you are not aware of the various issues that the management has to face on legal charges. We all know how much ppl love suing microsoft for every stupid stuff…buying youtube would have been the biggest microsoft mistake. Let us wait and watch the media companies come behind google. They escaped many lawsuits just coz they had no control on the search content…but this they obviously have lots of access
8) Again say if google does manage to increase its search percentage a lot to around 84%. Then they are ripe for an anti-trust. They have every power on earth to manipulate on what we see and what we dont. Politicians especially wont be happy (ever tried to search for failure in google ??)
9) The last point, fast internet access in the largest and growing IT markets like India and china is very less. And these web 2.0 applications have no chance of making any inroots there.
Again before i end, i am really interested in seeing your website visit log for the past one week till today just to see how much traffic a Microsoft FUD article can bring to your reducing traffic….
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robert, can we have a small graph of your website hits over the past week?? lol whenever it goes down you come out with a microsoft bashing post and only whenever you do such stuff do you have so many replies and ppl bother reading it.
1) You have not read the full article of balmer.
2) “Braveheart: why don’t you link to some of those Web spreadsheets that blow Google’s away? ”
Funny I wonder how on earth can you talk like a big web 2.0 guy when you dont have knowledge on this. Zoho suite makes google bite the dust.
3) “I’ve already replaced about 40% of my Excel usage with Google Spreadsheets. Why? Cause collaboration is a more important feature to me (since my employees work out of their homes an hour away from me) than pretty graphs.”
The first motive obviously is your company does not earn so much profit to give you all one. Second, you dont do a lot of excel stuff. A sheet with 10-20 rows is not what we are talking about. Most people who is excel use it for complex analysis. Reg. collaboration have you ever heard something about sharepoint???
4) ” Why we love YouTube isn’t cause we can watch other people’s videos. It’s cause we can upload our own lame videos!!!”
Again dont generalize with a “we”. I can assure that a lot of ppl i know have never uploaded even a single video into youtube. We go there to watch some movies (lol you get them in 7-8 parts), or to watch jon stewart. I am sure 90% of youtube users go there to watch videos. Well I can prove it by the simple fact that there are so many visitors every day, but the percentage of videos uploaded (that to personal lame videos”) is very very less.
5) “Back to Facebook. Is it worth as much as YouTube? I don’t think so because only college students associate with that brand. With YouTube everyone from 80-year-old friends to my son were using it and talking about it. Facebook is struggling to make its brand interesting to non college students. So far it has failed, which is why I don’t think it’s worth as much as YouTube”
Well facebook might be one of those long term shots worth a try. I am sure these college students would still like to keep in contact with their friends once outside school.
6) Reg. myspace. It has survived so long inspite of all the child predators and threats by sentors to ban it from schools…the reason Fox the mother company is a bush spokesman. Well a ban on myspace once a democratic senate or president comes will burst the myspace bubble…Hint: Remember how the stock market for online gambling companies fell??
7) “Warren Buffett doesn’t buy any tech stuff because he doesn’t understand it.”..
That is exactly what makes him a perfect intelligent businessman. I am sure that you are not aware of the various issues that the management has to face on legal charges. We all know how much ppl love suing microsoft for every stupid stuff…buying youtube would have been the biggest microsoft mistake. Let us wait and watch the media companies come behind google. They escaped many lawsuits just coz they had no control on the search content…but this they obviously have lots of access
8) Again say if google does manage to increase its search percentage a lot to around 84%. Then they are ripe for an anti-trust. They have every power on earth to manipulate on what we see and what we dont. Politicians especially wont be happy (ever tried to search for failure in google ??)
9) The last point, fast internet access in the largest and growing IT markets like India and china is very less. And these web 2.0 applications have no chance of making any inroots there.
Again before i end, i am really interested in seeing your website visit log for the past one week till today just to see how much traffic a Microsoft FUD article can bring to your reducing traffic….
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ok here starts everything…
http://business.guardian.co.uk/story/0,,1921154,00.html
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ok here starts everything…
http://business.guardian.co.uk/story/0,,1921154,00.html
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I don’t normally go to YouTube; I see YouTube vids embedded in other sites and blogs. Such embedded vids don’t have ads associated with them. Are those now going to be plastered with ads all over the place? If Google does indeed try to shove ads down people’s throats, I can easily see a YouTube competitor coming out of nowhere and taking over YouTube’s traffic.
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I don’t normally go to YouTube; I see YouTube vids embedded in other sites and blogs. Such embedded vids don’t have ads associated with them. Are those now going to be plastered with ads all over the place? If Google does indeed try to shove ads down people’s throats, I can easily see a YouTube competitor coming out of nowhere and taking over YouTube’s traffic.
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I use Facebook. I think what might make Facebook more appealing is that those who are college students are going to graduate and they might get their friends who don’t use Facebook to join. And they might not be in school. That’s probably more important than some person who’s never heard of Facebook joining. It has to be word of mouth.
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I use Facebook. I think what might make Facebook more appealing is that those who are college students are going to graduate and they might get their friends who don’t use Facebook to join. And they might not be in school. That’s probably more important than some person who’s never heard of Facebook joining. It has to be word of mouth.
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Why do you talk about Chinese people with such disdain? We are a great people, better than Christians.
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Why do you talk about Chinese people with such disdain? We are a great people, better than Christians.
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why don’t microsoft concentrate on fixing windows and ms office – their staples, like realing fixing them up, a total overhaul that patches all the securtiy leaks, bugs, pain in the ass quirks/flaws/limitations.
One of the most successful investing strategies is to invest in simple businesses that have a core focus and don’t try to diversify beyond their original scope.
have you all heard the saying that if building engineers built buildings like software engineers built programmes …
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why don’t microsoft concentrate on fixing windows and ms office – their staples, like realing fixing them up, a total overhaul that patches all the securtiy leaks, bugs, pain in the ass quirks/flaws/limitations.
One of the most successful investing strategies is to invest in simple businesses that have a core focus and don’t try to diversify beyond their original scope.
have you all heard the saying that if building engineers built buildings like software engineers built programmes …
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Microsfot doesn’t need to follow this sharade of “YouTube” and “Google Video” types of websites. What they do is OS, thats all they need to do to make money. Like all businesses it is all about the money, but i don’t think Microsoft would want to or need to advertise their website if they made a video hosting site, to create a so called “freindly commmunity” youtube isn’t exactly a nice communtity to be involved with. Its the same with microsofts live search engine, hardly anyone i know uses it, i don’t use it, but they don’t need to advertise that they have it, because the don’t see it as a “big thing”. Its like Microsofts gaming studios. they dont need to advertise that the new xbox is coming out, as one word about it getting leaked out, and its all out, then all they need to do is advertise once or twice that its coming out, and there you go, not that exspesive? Plus if microsoft was to create another one of these websites, it wouldn’t be good for their apperance, as they would just be known as they copied of another site. plus they would get in the same trouble as youtube has now, with getting sued for copyright laws.
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Microsfot doesn’t need to follow this sharade of “YouTube” and “Google Video” types of websites. What they do is OS, thats all they need to do to make money. Like all businesses it is all about the money, but i don’t think Microsoft would want to or need to advertise their website if they made a video hosting site, to create a so called “freindly commmunity” youtube isn’t exactly a nice communtity to be involved with. Its the same with microsofts live search engine, hardly anyone i know uses it, i don’t use it, but they don’t need to advertise that they have it, because the don’t see it as a “big thing”. Its like Microsofts gaming studios. they dont need to advertise that the new xbox is coming out, as one word about it getting leaked out, and its all out, then all they need to do is advertise once or twice that its coming out, and there you go, not that exspesive? Plus if microsoft was to create another one of these websites, it wouldn’t be good for their apperance, as they would just be known as they copied of another site. plus they would get in the same trouble as youtube has now, with getting sued for copyright laws.
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In a recent estimate, Facebook.com was appraised at $12 Billion.
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In a recent estimate, Facebook.com was appraised at $12 Billion.
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i’m 34 and use facebook haven’t been to college in ovre a decade… most of my friends are way older then college age… your argument does not have weight.
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i’m 34 and use facebook haven’t been to college in ovre a decade… most of my friends are way older then college age… your argument does not have weight.
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noobs
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noobs
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