Right off the bat I need to admit that I’m in no position to second guess Steve Ballmer, CEO of Microsoft. But reports in the last couple of days point to discussions between Facebook and Microsoft about an acquisition of the social networking giant by the beast of Redmond.
Lets look at why Microsoft needs to do something;
Clearly MS’s web strategy hasn’t been overly successful - they’re a company that has made all it’s money by creating software that gets installed on corporate and home machines. Changing its business model to one that derives revenue from web advertising, a la Google, is a real challenge. As most commentators agree, it’s very hard for a business to give up a great (but shaky) income stream to move to a new way of doing business that risks all that. (Especially a business that has Wall St to answer t)
While one would think that with the resource base that MS has they could create a scaled and profitable internet business on their own but history tells us it’s just not in their corporate DNA.
Hence the acquisition trail - and the last few months talks with Yahoo which some would say have now broken down completely.
Which gets us back to Facebook. I just don’t get it - sure Facebook has squillions of eyeballs, but most realistic commentators agree that it is at the plateau of its growth phase - user activity (and remember that it’s user activity that MS wants, not new subscribers - after all it is continuing eyeballs that create value for advertisers) has fallen and FB seems to be wandering aimlessly trying to find ways to keep existing users engaged - chat being the latest (and, it has to be said, pooly executed) development.
So my advice to Steve - don’t do it, Facebook is just the latest in the fad fueled Web 2.0 startups, much better to work a new monetization channel beyond advertising - rather than trying to catch Gogle at their own game, create a game with entirely new rules.
This morning I read that Burger Fuel are expanding their operations outside of the current Australasian spread and have sold a franchise to Dubai. In the past I’ve been somewhat sceptical of Burger Fuel, both pre, during and post IPO. After reading the news I momentarily thought that perhaps I’d been a little hard on BF.
I was relieved (for my own sake entirely) to read this post by Dan who has spent time working in the UAE. Dan says that;
If the announcement had been that the first store was at Mall of the Emirates you know it would have done well because the food court there is always pretty busy. But instead the first store is at Festival City. I visited Festival City last August and it was a ghost town.
In defence of BF, Dan did go on to say that Festival City is not yet finished and may well prove more popular once it is. I remain firmly positioned on the fence, and leaning heavily towards the paddock of scepticism!
I’ve talked about online storage and sync in the past (see here and here). My perspective has always been two fold;
Don’t store, but sync. Storage at one location only is a recipe for disaster - websites go down as much as hard drives fail. Syncing however means you create your own redundencies
Do due diligence - there is a reason that startups IPO rather than self-fund (and reasons beyond money). Listing build credibility (as, it has to be said, does backing by well known VCs). With sync/storage options always check your supplier for potential future problems which could put your data at risk
I was reminded by this when reading Mike’s post about Omnidrive - the online backup service that seems to be dead and buried. Reading the comments on this RWW post (which foretold of Omnidrive’s demise) is a sad tale of woe, and a warning to both startups and users of new offerings.
An interesting article this morning calling for more Diversity in corporate boards (actually it called for more diversity but I couldn’t help plug Diversity Ltd’s governance experience!).
I’ve had a bit to do with the pool of professional directors in New Zealand and I have to say I came away a little unimpressed. I’m sure the pool is useful for legacy industries (the sort of low value add commodity stuff that we’re all meant to be moving away from), but I can’t help but think that they’re in a little over their heads when it comes to hi-growth, hi-tech companies.
I’ve heard all the arguments that say that the most important thing is having experience with growth (no matter what the domain) ad the connections of well regarded directors are valuable but I’m not so sure;
Most companies with independent boards in New Zealand are slow growth, legacy businesses - I’m not sure how that translates into fast moving experience
especially for hi-tech businesses, connections are less important than product and scale - sure experience can help with execution but most non-executive directors that I know are reluctant to be so involved as to have a real hand in operational execution
I’m 100% in favour of independent boards for small and larger businesses, but believe that the current pool of candidates doesn’t inspire confidence in those considering appointing a board.
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