Microsoft CEO Steve Ballmer has said he will buy 20 web companies a year for the next 5 years. This comment is so stupid for a number of reasons.1) Where did he pull 20 from? What if there aren't 20 companies in a year that are worth buying? So Microsoft is just going to buy crap to meet Ballmer's goal?
2) He promised to spend between $50 million up to $1 billion on each. Okay, so which company is going to be the one to settle for $50 million when you already know he's willing to go as high 20 times that?
3) He made it at the Web 2.0 summit, so this was basically a reverse sales pitch. 'I'm going to be buying 20 of YOU a year for the next 5'. Is that supposed to excite them - or intimidate them?
4) Matt Asay has it exactly right:
Web 2.0 is all about collaboration and architecture of participation. Web 2.0 grows through community. Ballmer plans to get into this market by buying communities...It's really hard to see this comment as anymore than an admission that they can't develop their own web products to compete with the likes of Google and Yahoo despite being one of the biggest companies in the world.
...which implies that he's not very good at building them.
This reminds me of the Yankees a few years ago when they basically had no farm system thanks to trades and so their plan to keep up was to simply keep buying more players with the largest contracts in league history. They still haven't won a World Series since 2000 with this strategy (which they have been slowly reversing).
5) "Those will be good acquisitions, and they're important to us," he said. "And they're of strategic importance." Okay, Nostradamus. Again how the hell does he know they'll be good before he even knows who or what he'll be buying? If he's to be believed, at least a few times he's going to be buying for buying's sake - which is never a good thing.
6) He supposedly offered up his email for unsolicited pitches. How desperate is he?
7) He didn't even bother to lay out specific goals or areas of interest. Just buy, buy, buy. Great plan. Microsoft is already spread too thin, what happens when they're running a cooking website?
Eric Berlin thinks this will be a good thing - for the companies' founders at least - which is true in that who wouldn't want $50 million - $1 billion? But if Ballmer actually lives up to his 20-a-year benchmark, how many of these companies will get neglected and eventually run into the ground?
Do you think Microsoft will really care? No, just as long as Google doesn't get em.
[photo by flickr user Sumith Meher]
2 comments:
Was google "bad at building communities" when it bought youtube? I don't like microsoft but I think you are taking it a little far.
First - it wasn't my quote - but I do agree with it.
2nd - I would say that I don't think Google is particularly good at building communities. I've been very critical of them for their ineptness in tying their products together in a social way - which they are just now starting to do.
3rd - as far as I know Google has also never come out and said "we're going to buy X amount of companies this year". this is a stupid thing to say in my opinion. Why is that a goal? Why are they using that to rationalize their web presence? Shouldn't MS be first and foremost trying to internally build the best products they can for the web - that statement goes far to suggest that they aren't, they're content to buy their way in.
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