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Ballmer Sounds Off
PreacherTom writes "Steve Ballmer shares his thoughts on the Web 2.0 phenomenon, Zune, XBox, Vista, Bill's upcoming 2008 retirement, the future of Microsoft, and other subjects. For example, regarding the GooTube deal: "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. The truth is what Google is doing now is transferring the wealth out of the hands of rights holders into Google." He's blunt, if nothing else."
Interviewer: Aren't you oversimplifying things? I mean YouTube was taking down copyrighted content once they were notified of its presence.
Ballmer: I'd never be guilty of oversimplifying something--I was merely attempting to explain a situation to the rest of the world about a company that just happens to be one of our biggest competitors and a direct threat in the search and advertisment industries. You don't remember it like that? Well I do and so does DEVELOPERS DEVELOPERS DEVELOPERS DEVELOPERS
My work here is dung.
Uh. Surely if YouTube is the ticking time bomb of copyright infringement that it's claimed to be, then what's happening is Google transferring money from the hands of Google investors into a holding tank for eventual litigants.
I mean, if you were Ballmer, wouldn't you be thrilled that Google had bought YouTube?
Now that YouTube has money behind it, Google can expect legal action from a whole bunch of people... some of it justified.
Coming from anyone else, I can cope with the picture that brings up in my mind. But from Ballmer?
"there's no business model for YouTube that would justify $1.6 billion. [...] what Google is doing now is transferring the wealth out of the hands of rights holders into Google"
That sounds like a business model.
At $1.6B, Google has transferred wealth from rights holders to the (outgoing) owners of YouTube.
What is clear is that Ballmer has no clue what's going on. Just like during the last bubble, when Microsoft was the last to "get" it. But then there was no Google producing apps closer to the consumer than Microsoft sits. So maybe this time a bubble, maybe its pop, will actually finally wash MS down the drain, the way we all thought we'd see with "missing the Internet" or Netscape or "Bob" or the monopoly decision or...
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make install -not war
This blog post http://battellemedia.com/archives/002973.php
Has this thoughtful closing:
It's about managing the debate, it seems.
Get thee glass eyes, and, like a scurvy politician, seem to see things thou dost not.--King Lear
Think in this way: How many people visit YouTube every day? Millions.
What happens it you put Google adverts there? Yes, you guessed. You will have damn a lot of clicks.
Does it sound like a business model? Yep, I think so.
Is it highly overpriced? Up to Google, they had cash - they need to invest it. It gave them about 80% of downloaded videos. Is it good? For them, for a while, for sure. What happens next is up to them, and RIAA, MPIA and so. If they can struck some kind of deal, who knows. With their cash, influences.
That's exactly what Ballmer said. He 'wouldn't pay that much cash.' He MIGHT. Because it's very risky - but we all know that risky actions are most profitable. Time will show.
"an experienced, industrious, ambitious, and often, quite often, picturesque liar" - Mark Twain
How about "The Internet" which they kindly link to from the start menu? Remember that it won't fit in the recycle bin...
I bet Microsoft is calling around today asking if by chance somebody was to back them up financially would they invest in this cool company they know about that is tossing around the idea of a lawsuit
against google for infringement....you know wink, wink we got your back bro!
Got Code?
Ballmer let slip at the end, (regarding European vista launch date):
"...we'll have to push the button because our partners--hardware makers and retail chains--need time to ramp up supply chains, marketing, and demand generation."
Demand generation. Vista itself has no demand (meaning no extra benefit over XP), so they have to artificially create demand now.
Everyone knows that You Tube has loads of copyrighted material that shouldn't be there. With this in mind, why would Google buy it and risk having their ass sued off? I wouldn't have bought it if I'd had the money for this one reason, but for some reason Google have done. Maybe they'll just remove all the copyrighted material or just charge a subscription for it?
Basically all it boils down to is that You Tube is the biggest video site on the net which Google now control and Microsoft are just pissed because they've just lost out on the biggest multimedia opportunity of this decade.
Summation 2
Vista and Microsoft is irrelavent? I suppose that's how Microsoft posted 9.74 Billion in revenue in Q1 06 which is a 7% increase year-over-year? That all occuring without Vista and Office 2007...am I missing something?
Hasn't any business been paying attention?! People will actually spend money to avoid advertising.
Actually, that company exists. But you've probably never heard of it because they never advertise.
Ballmer wasn't using wealth to mean "money in the bank account." He was using it in a more technical sense of the word. "Wealth," economically speaking, is stuff that has economic value. Cars and potatoes and the like. Money is just a means of quantifying wealth and facilitating the process of bartering for it.
Information (music, videos, etc.) has economic value, and is therefore wealth. That is what Ballmer was talking about, the transfer of that economically-valuable information from the copyright holders to google.
Now, this statement is still absurd, because of some "have your cake and eat it too" mentalities at work behind the concept of intellectual property.
If I take raw materials and use them to build a car, I have created wealth. I am now wealthier because of it. I also own the wealth I created, which means I control it. I can give it to you if I want, in which case you are more wealthy and I am less wealthy. Obviously I can't keep doing this endlessly without running myself dry, so I will need you to give me something back. Hence we barter. But what's important is that once I give that item to you, I don't have it anymore.
With information it is different. I can give you a copy of it without giving up my copy of it, and without having to expend resources in its creation. So, that means, I can give it to you and still keep it! Thus I get to make money by claiming your wealth (in the form of the money you pay me) without actually giving up any of the wealth I already have (the music/video/whatever).
Of course this is absurd, and demonstrates where common information-as-property metaphors fall short. It doesn't make sense for me to sell you a car and then claim that I still own it, so why does it make sense for me to sell you a digital file and then claim that I still own it? In the real world, I wouldn't have that car anymore, so does that mean that I am obligated to delete my copy of the song once I sell it to you? Of course not. Treating information as property leads to these sorts of contradictions because information is not property, and doesn't work the same way.
"Intellectual property" is basically a game of pretending like information works like property in some ways, but insisting that it does not work like property in other ways. We pretend it works like property when individual consumers are concerned (they can't make copies of cars without resources, so they shouldn't be able to make copies of information without resources either), but we insist that it does not work like property when rich businesses are concerned (sure, I sold you a COPY of the data, but really I still own the data). This is not only logically inconsistent, but economically harmful (it results in lots of money flowing upwards without any real wealth flowing downwards).
We should instead treat information as information, and rethink copyright laws. They should not arbitrarily restrict the zero-cost duplication and distribution of information (which is a great benefit to humanity in and of itself). We must also recognize that money not spent on electronic information is not money lost to the economy, but rather, money that can be spent in an economically healthy way (used to buy food or cars or any other traditional exchange in which the wealth flows in both directions).
I have already written more than anyone will read, so I won't bother to get into the false claims that intellectual property laws protect content providers (which they do not) and that giving them up will result in no new creations and cultural starvation (which it will not). I just hope that the next generation will be able to see through these hypocritical fallacies of "intellectual property law" and act more intelligently than the current generation is acting.
Uh. Surely if YouTube is the ticking time bomb of copyright infringement that it's claimed to be, then what's happening is Google transferring money from the hands of Google investors into a holding tank for eventual litigants.
No, because Google can spend huge volumes of cash defending itself - and as long as the service remains timley in removing copyrighted material, there is no problem. Basically, they have a lot of money to sue for but they can make sure you spend a lot as well. The are a larger, but a hardened, target.
I mean, if you were Ballmer, wouldn't you be thrilled that Google had bought YouTube?
No. Read the interview again - where he says "Someone has to compete with them. Maybe us, maybe Yahoo" and that "there has to be two companies competing in the media space for media owners to see value". Notice the realization and admission in that statemnet is that Google is ONE of those two companies. That means only ONE spot is left - and by admission it may not be Microsoft! Do you think that makes Balmer feel cozy, that 50% of the opportunity to control the media market online is gone now? Look at how dizzy he was on the question about YouTube valuation. He can't see it, and it's killing him. He feels like he's missing some part of the picture. He's essentially saying "I would pay 1.6 billion if I knew what the hell was going on!". Even his staement about the need to get in and "milk" a service was classic Microsoft that misses the value of a social network, which is in expansion and not squeezing it to death.
On a side note Balmer is dead wrong on that score, YouTube even when sending no money directly to media is creating value for the media companies even with illegal content by increasing mindshare and viewership of a show so media companies can collect money via other channels.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
there's no business model for YouTube that would justify $1.6 billion.
or, translated to normal english:
"We have no idea how they plan to make money on this, so it must be impossible."
The sounds of a man who can't accept that there might be people smarter than him on the planet.
Assorted stuff I do sometimes: Lemuria.org