Steve Ballmer doesn't understand social networking

Says Robert Scoble

Read the discussion here

Part of what Scoble beef

When I worked at Microsoft I heard this over and over and over again from various engineers and program managers who STILL haven’t competed effectively with WordPress, Flickr, Skype, YouTube, or any of the other things over the years I’ve heard this “we can build that in a few weeks” kind of arrogant attitude attached to.

But, remember eBay? Remember how dozens of competitors tried to get into the eBay space? (and still are?)

Why aren’t they succeeding? Because eBay is NOT about the technology. It’s about the community and unless you have something that’ll convince the buyers and sellers all to switch all at one moment you’ll never be able to take eBay’s market away. Translation: it’s too late and eBay has huge defensibility around its business because people won’t move away from it even if you demonstrate 5x better technology.

Same with Facebook. I’m not moving away from it. Why? I have 5,000 reasons why (and another 500 already who want to be included in my Facebook network). Unless you can convince them all to move I’m not moving. This is why LinkedIn isn’t going to disappear anytime soon, even though I like Facebook’s approach a lot better. It’s also why MySpace isn’t going anywhere. My son says his friends are all on MySpace. My brother’s bar is on MySpace. They aren’t moving no matter how hard I evangelize Facebook.

Which gets us back to Ballmer’s quotes.

First, let’s share this one: “I think these things [social networks] are going to have some legs, and yet there’s a faddishness, a faddish nature about anything that basically appeals to younger people,” Mr Ballmer told Times Online yesterday.

I’m 42. Hardly young. And Facebook is appealing a lot to people in my social network and age group lately (and so is Twitter and other social tools like Pownce, LinkedIn, and sites that use social groups like Yelp, Flickr, Upcoming.org). I guess Ballmer missed that. This is what happens when Microsoft executives don’t get outside of their ivory towers very often. Steve, you really need to go to any tech industry conference and hang out in the hallways. Don’t come to San Francisco, you won’t believe anything you hear here anyway. But go to, say, LeWeb3 in Paris and hear what they say about social networks. You’ll probably hear Bebo. Facebook. And a few others. From even the old folks. Last night I was at a National Geographic event and lots of people were talking about Facebook.

Comments

[Steve Ballmer]

Ofcourse I understand it!
It's the latest fad, like bell bottoms, hot pants, .,....

sheesh

[Alan moore]

Steve,

Thanks for dropping by. But its not a fad for some very critical reasons. We are a We Species. Human beings have an innate need to connect and communicate. So whilst many of you get excited about the monetising of the technology, its not the technology that is driving these interactions. So in fact its not web 2.0 blah blah, its a "We Media" for a "We Species." Further, in our advanced economic age, our identities that were once formed by external forces; where we were born, the immediate geography, social customs, religion, and industries related to that area, no longer is the reality. In a post modern world people can have many selves... this is called Psychological Self Determination, the ability to exert control of the things that mean the most to me. These people Gen "C" the Community Generation, demand a high degree of influence and participation over the things that mean the most to them.

Gen "C" go on a quest for identity, otherwise they become very noisy ghosts in the machine. As a consequence through our super connected world, people are connecting to the thnigs that resonate with them, they seek out the things that mean the most to them.

If your focus is Myspace and Facebook et al, then maybe you might win a few points, however on this blog you will find deep insights into why our world today is about engagement, participation, co-creation, Prosumersim, shared knowledge production . Yochai Benkler calls it the Wealth of Networks. This the world of Linux of Open Gardens vs. Walled Gardens. This is about shared and aggregated knowledge/culture vs. proprietary knowledge and DRM.

We see the "Social networking" benefitng science (SIPHS) shared knowledge aggregation, we see the "wikinomics" of the developement of the Boeing 737, we see the BBC opening its API's at BBC backstage where people are co-creating exciting mashups, we see Team buying in China, we see the migration of retail politics to networked politics.

Peer to peer flows of communication are up to 10 times greater than all other web traffic depending on the time of day. You gain control by giving u control.

What did Jonathan Schwartz say about his 1000 bloggers at Sun Microsystems? That his 1000 bloggers have done more his company than a $1bn Ad campaign. He talks about transparency and trust, that via his 1000 bloggers there is a window into Sun through which people can observe a culture of honesty and tenacity. Microsoft has some 2500 bloggers are they not part of this "FAD".

Is the Huffington Post or Current TV or OhMyNews part of the the Wealth of Networks?

If you would like to get together to exchange views I am more than happy to do that

But thanks for dropping by :-)

KInd regards

Alan

[William Volk]

Steve,

You need to relax. Why not take some time out and play a game or two:

http://mynumo.com/iphone/iwhack/iwhack.htm

Thanks.

[Tomi T Ahonen]

Hi Steve, Alan and William

Steve, thanks for stopping by. I understand what you mean, and much of what new technologies bring, can fairly be called fads. The transport industry has had its range of fads from the cars of the 1950s emulating jet planes and rockets with their winged fenders, to the recent fad of the SUV. But also the advent of mass transit - the introduction of the railroads in the early 1800s brought about a radical shift in human behaviour - such as tourism, one of the largest employers on the planet and for many countries their largest industry.

If we catalogue all the recent technology-oriented phenomena that have hit the covers of Business Week, Economist, Forbes, Fortune etc, I am happy to grant you most of them are not much more than the digital equivalents of the bell-bottoms and hula-hoops: iPod today, iPhone tomorrow.

But Steve, occasionally the huge change happens - the really seismic shift, that truly also causes change in human behaviour. Like tourism emerging from these silly thing-a-ma-jigs that explode all over the countryside and make the milk of cows turn sour (as many complained about the first trains 175 years ago).

And with that, Alan has a very good point here on our blog (and obviously as Alan referenced Robert Scoble's posting, we also obviously agree with him on this).

Digital communities, social networking, user-participation and co-creation. These were not practical and commercially feasible in the last decade or anywhere before in mankind's history. But this decade suddenly enabled that behaviour.

And it does change "everything." Talk to any teenager in any country, Japan, Finland, Israel, India, Canada, Brazil, Australia - and yes USA - and ask them do they expect to be in control of their media. To be allowed to participate in American Idol voting, or to post their movie reviews on Amazon, or tell of their personal love life in their blogs etc. This is universal, Steve, a universal shift, in what Alan and I have coined "Generation-C" the Community Generation (in our book Communities Dominate Brands, 2005).

This is total change in how young consumers behave today. Depending on how mature the market is digitally, the age limit of true Gen-C membership is higher or lower (higher in South Korea for example, lower in Germany). But for this new generation there is no going back.

It is far from being just a fad, of being something feeting, like perhaps many parents hope current popularity of piercings and tattoos might be.

As this generation grows up, they will take the power of their communities (and their permanent connectedness) with them to the work force (as we already see in Scandinavia, Korea, Japan, etc).

Again - if you doubt this, consider the power of community and permanent connectedness to the police. In the 1800s the police forces had no walkie talkies, no carphones, no way to connect in real time with each other. When police radios became technically possible, it was a total shift in how police car chases for example happened. Before car radios, one police car tried to catch the villain. After car radios, the police called a few miles up the road to another police car and set up a road-block.

Total change. Steve, there is no going back after you discover the power of community (and permanent connectedness). This is not a fad.

But Microsoft really - REALLY - needs to know this, undestand this, capitalize on this. Your technology sits on most of the second most relevant device for this community future (the PC obviously) and you also have a small stake in the the most important connection, the cellphone - through the Windows for Mobile operating system for smartphones.

Let me take you back to the tourism industry. If a railroad operator (like say the Great Western Railroad in England) understood that with its transportation technology will also come a new industry of tourism - then it will mean huge opportunities out of hotels, restaurants, shops - which will be CENTERED around the railroad and its stations. And yes, the GWR actually did this (thanks to the master engineer Isambard Kingdom Brunel who served on their board)- ie the grand hotel at Paddington Station in London was the world's first integrated hotel and railroad station. Here was a supplier (and manufacturer and operator) of railroad-based transportation technology, which noticed a new industry and went to make big investments - and for decades also added profits - out of the hotels they built along the GWR railroad and its stations. Same for restaurants etc. Their golden age lasted essentially well into the time of air travel..

If you Steve - and Microsoft - misunderstand the significance of digital communities and social networks, simply as a short term phenomenon, a fad, perhaps only for the young (I'm 47 years old, passionate member of Forum Oxford community, contribute to Wikipedia, blog daily, maintain my Linked In profile, have friends at Facebook, etc etc etc.) - then you are abandoning the biggest current new business opportunity, where your technology sits at the very core of this experience.

You could drive Microsoft to capture this space. Or you could abandon it to your rivals like Google, Nokia, T-Mobile, Yahoo etc.

Finally, you don't need to take our word for it. Business Week, in the June 30 issue of 2005, when its cover story and half the magazine was dedicated to digital communities and the connected consumer, said that this was the biggest change since the industrial revolution. Not that PC that your company was built upon, nor telephones, automobiles, airplanes, or even the internet. This is the biggest change since the industrial revolution.

Or if you think Business Week is too prone to hype, you cannot fault the Economist for overhyping. When the Economist put the connected consumer and digital communities onto its cover story on April 4, 2005, The Economist put it this bluntly: Those companies who do not understand digitally connected customers will not survive.

I am a passionate reader of the Economist. I have never seen them make such an absolute statement on any change in my lifetime which includes a couple of stock market crashes and several oil crisis episodes and the infamous Millenium bug of New Year's Eve 2000.

Steve, we really do need Microsoft to be part of this future, and to help build the tools, the methods, the platforms to enable this new future.

I hope you can reconsider your position. We did not mean to attack you personally, Alan was referring to Robert Scoble's blog and we both agree with that blog and the discussion there, that Microsoft is not showing the insights and leadership in this area - and if so, that certainly must also then reflect on you.

But it is not too late. Only earlier this year it was that Vodafone - the world's largest mobile operator group by revenues - decided they intend to go strongly into mobile communities and want to make communities 10% of their revenues. You are not too far behind, but you do need to wake up.

This is not a fad.

Thanks for writing.

Alan - obviously I agree totally.

William - ha-ha, thank you, yes, gotta go do some iwhacking again, I have some stress this week to release...

Tomi Ahonen :-)

[Alan moore]

IVAN tomi

Alan