The Gang XVIII
Leo Laporte joins The Gang - Jason Calacanis, Mike Vizard, Dana Gardner, and Robert Anderson. Recorded Friday, March 7, 2008.
Jason- Haha, thank you my minions! I think Steve’s at the airport
Mike - Yeah, I think he is
Steve - I’m on mute, continue to talk amongst yourselves
Tina - Continue to talk amongst yourselves . Ok Steve how about I let the guys start the show, and you join us when you can?
Steve - The show has already started honey
Tina - Oh well there you go
Jason - The thing is, the show never ends Tina.
Leo- Who is doing that great Adam Kurry, who is that?
Jason - (Funny voice) Adam Kurry!
Tina - Jason Calacanis, I believe.
Leo - Is it Jason, that’s good, you’re good Jason, you know, if you ever need another career, you could be the rich little of technology
Jason - Dude listen its Mark Canner and dude if you’ve got billions of dollars of our information, don’t bogart the social graph…dude
Leo - yeah man, dudes not here man…so how does this work, ive never done this before, it’s kinda chaotic?
Jason - You know how on Twit, we introduce the guests we have a set of topics that are organized and a theme in fact and a set add location where we talk about stuff and take all of that structure and the rss feed that people subscribe to and just basically get rid of anything that has any kind of format and just talk stream of consciousness—
Leo - Ok, and I’m naked right now, that’s ok right?
Jason - Oh what’d you mean, that’s standard. What percentage of podcasts are recorded by people who are either naked and /or haven’t showered yet? I think its pretty much standard, pretty much every one
Leo - well thank god we don’t know. You cant tell!
Leo - So how many of you are at Mixx? In Vegas?
Jason - I’m in LA, I’m not at Mixx
Leo - Anybody in south by southwest right now?
Mike - I’m in New York, just back from cbit,
Jason - I’m just back from a double secret conference
Leo - You cant say the name? I know what conference you’re at, you can’t say it? You can’t even say where you were?
Jason - I can’t say where I was, no, it’s off the record even the existence of the conference is off the record
LEO – You’re kidding! But everyone knows about it.
JASON - You know, when 20 CEOs disappear when 20 or you know 100 finance people disappear, they gotta be somewhere right?
Dana - Yeah that would be called a digg sweepstakes
JASON - (Laughs) exactly
LEO -You know Mike Arrington every six months publishes this rumor you think it would be more credible now than in the past?
JASON - I think it is.
LEO - This time it’s for real.
JASON - With the economy, they don’t need to sell right? Because I think they’re making about 10 mil a year and I think they’re pretty much breakeven or at least mostly profitable, on that?
LEO - Is there enough pressure from the investors to sell?
JASON - Not usually, I mean they have some pretty good investors, I mean, I don’t think they’re gonna go away so I don’t think there’s much downside risk like its gonna fail, right? It’s a really good site run by a really good team, the same way Slashdot still exists today, engadget exists today, its become a seminal brand already, there’s no downside in terms of it going away, the downside would be would it be less valuable or be perceived to be less valuable in the future?
LEO - Well already they’re saying, at least if you believe Mike, they’re saying that the 200 mil that they were asking before, that was the bottom.
JASON - Well I think that it was 300 that they were hoping for, which I think it a little ridiculous, you know if you make 20 times 10 million dollars a year top line revenue is 200 million.
Old guy- I’m sure companies like Google and Microsoft are sitting there saying, you know, what’s the cost of us building a service and if we build a service what happens to your valuation
LEO - Well Jason knows the cost of that, Jason what was the cost of building the service?
JASON - Well I built it for under a million bucks. Probably worth 50. It gets like 6 million uniques now so I basically built a 50 million dollar company for under one mil.
LEO - they didn’t close it? When you left?
JASON - No, it’s at Propeller now its independent and they put no promotion into and despite that its like 6 million uniques and from what I understand its 25% the size of digg it’s the second biggest social news site with no promotion so…
LEO - and yahoo has got buzz
Jason - yep
LEO - which is also a digg clone
JASON - and I guess ask did a white lambo version of digg, so—[[inaudible]]
Leo - so that begs the question, right, why wouldn’t Microsoft— it’s just the people I guess
JASON - Well it’s the people and the pageviews and that’s why Microsoft already bought the page views.
LEO - so how much are the page views worth without the Microsoft advertising deal
JASON - well that’s an interesting question cause Microsoft put a floor in, and if Google buys it the deal is off
LEO - Well nobody knows it I don’t know if he knows it
LEO - That’s a Mike thing
JASON - Pure speculation that they would be able to break the deal with them
LEO - Yeah he says like any sale would be likely to give Microsoft the
option to terminate the deal
JASON - Hm, yeah, don’t know if that’s true or not but I mean Microsoft maybe but not Digg. I mean, Google would be buying something and it would have to wait for the deal to run out with Microsoft, which is not that big of a deal, cause if you’re gonna buy, you’re in it for the long term. AOL could get bought and sold and Google owns 5% of it, when Google went public it was rumored Yahoo made like a million dollars
Old man- Did you help drive valuation down with your, I guess you were chatting with the fellas at Newsweek about the “revenge of the experts?”
JASON - I didn’t even know what the name of the story was, I’ve always said that what we’re doing is using the wisdom of the crowds at Mahalo as well as using experts so I don’t believe its either or, I think its an and. You wanna have the wisdom of the crowds, and you want to have someone checking the wisdom of the crowds. That’s what I did at Netscape, put editors on top of the social news, sort of to get rid of spam and that’s what we’re doing at Mahalo—networks submitting links and our people writing high quality pages, and at the end of the day that’s really the best result, I believe.
MIKE - You could do the Jimmy Wales technique and accept donations for expert editing—
JASON - Big dinners? Haha! …Oh man. I don’t even wanna go there.
LEO - Now Jason, you’re a regular on Valleywag. But they’re nice to you.
JASON - No, they beat me up.
LEO - They’ve become the national enquirer, here.
JASON - Yeah, it’s pretty brutal. I mean the guys sex life is his business,
right, who cares?
LEO - But I think Kevin Rose is breathing a sigh of relief because I think they were covering his drunken escapades.
JASON - Yeah, they were triangulating on him, he’s got to keep it low key during this period
LEO - He owes Jimmy Wales a dinner, and maybe a thousand dollar steak
MIKE - Its Valleywags business, not his.
JASON - Yeah, basically Kevin’s gotta slow his role—the role has gotta slow. Cause you don’t wanna be like going out there and climbing like thirty feet up in a hotel room drunk
LEO - Yeah, that’s pretty weird, yeah.
JASON - — and like, fall on your head and go in an ambulance while trying to sell to Microsoft or Google, they might think, well, what exactly are we buying into here?
MIKE - And I guess Jimmy Wales is gonna have that same problem, I mean with Wikia, who’s going to invest in a guy who is…whatever he’s doing, you know, its out …
LEO - I talked to a former director there and he said that Wool, who is also former director and the guy who’s leveled the most credible allegations at Jimmy really has a major axe to grind and is not, in fact, credible.
JASON - Really? I know Danny wool and I’ve been hearing these stories for a while from multiple sources but I think Danny is the first guy to come out with it.
LEO - Now we’re sounding like Valleywag! (Laughs)
JASON - We are! But his sex life, and the fact that he’s got 6 or seven girlfriends around the—
Leo- that’s not the issue.
JASON - That’s not the issue…well, people wanna say it was a character issue because he was married, or not married, I don’t really care. The thing that is an issue is flying his girlfriends round to be the press secretary which seems to be true
LEO - And on a donor’s money
JASON - Yeah, on a donor’s money, and massages at Russian massage parlors and steak dinners or whatever, you know the people at the foundation are saying that Jimmy’s a great guy and we didn’t pay him for anything that’s wrong, they didn’t say that he didn’t try to submit those expenses. He did try to take this money out of the bank and he got basically, people stopped him.
Dana - And that’s when you say you just had no really aggressive assistant, you know, who was filing everything.
JASON - Well I mean listen, you know when you’re doing something wrong, so the guys hanging out with a bunch of people who are rock stars, the guy is getting treated like a rock star and I think it just went to his head a little bit, you know, I’m a rock star and I deserve a $1300 dinner or a massage or whatever. I think he’s a very disingenuous guy. I’ve met him a bunch of times and there’s a lot of people with whom he has a credibility issue. The fact that he has washed Larry Sanger out of the history of Wikipedia—Wales still goes around and says Larry Singer did not create Wikipedia, he was just an employee. The Wikipedia community absolutely disagrees with him. Larry Sanger came up with the concept of using Wikipedia—Newpedia was failing, and Sanger came up with the idea of using a Wiki for an encyclopedia and basically there would be no wiki inside the pedia if not for him.
LEO - Mm hmm.
JASON - So I give him credit, it’s just, small minded and shows a lack of ethics. I think he does have an ethics problem based just on that. To deny the guy his rightful place in history is just so wrong. It’d be like me saying Peter Rojas and Bryan Alvey didn’t have anything to do with Weblogs Inc. How could you do that to them, you know? It’s just not fair to a person, they put all that work in.
Steve - So, how bout them Mets?
(Group Laughs)
MIKE - Well, how bout that Mixx?
JASON - Oh god, Mixx was a disaster.
Somebody- Well Mixx was amazing, but nobody seems to care on this call. I was the only person here….No there were a lot of people here.
LEO - There was a lot of news about Mixx and I think everybody loved the Kawasaki-Balmer interview conversation.
Steve - I’m completely fed up with that guy Kawasaki but he was terrific on that Balmer thing.
Mike - I think it was tiresome that he kept cracking on Balmer about how much money he has or if he flies on southwest, I mean who cares, that was tiresome.
Steve - I thought it was actually really interesting because Ballmer succeeded with just one slight slipup in really selling the idea that Microsoft is one big warm cuddly gorilla.
JASON - Well definitely gorilla, I don’t know about the cuddly part.
Steve - No, he was very much on message, in sync with what Ozzy had said the day before. Where he sort of dropped it for a second was when somebody actually mentioned Adobe, basically he lapsed into 2001 and went, “Oh yea, you mean those guys who we crushed?”
Dana - Those guys have a nice little Pdf maker, that’s what he said, that’s really great.
(All laugh.)
LEO - [Adobe] they did a little more than that.
Steve - so, it was basically, “they’re dead, what do you want to know?” But you know, Silverlight is awesome, it’s just unbelievable.
LEO - I played a little bit with the hard rock café demo that they put out, and that was pretty impressive.
Steve - I was sitting there for an hour, about, watching those demos and I started to lose it and go into acid flashbacks from the 1970s. And then all of a sudden I realized, “Wait a minute, I’m not looking at Windows here…” It was really stunning. And talking to some of the people afterwards, at the engineering level, there’s very little that they’ve left out of Windows foundation. Robert, are you on the call?
Robert- Yeah, I am.
Steve- Well you might want to give a little bit of information about the relationship between WTF and dotnet and whats going on within silverlight. It’s a very small run time but it does almost everything that Windows does.
Robert - Silverlight is a subset of the full.net environment. And basically WTF is the communications framework and WPF is the presentations framework for windows longhorn and then for windows vista, although its also available for xp but silverlight is also a subset of a capabilities of the presentation foundation and as silverlight 2 comes out were going to see a much richer platform for developers to build other rich clients in the old windows smart client way but also much more interestingly also build those for web deployment with no smart client at all but living inside the browser. And already today using silverlight you can have local storage but with version 2 it just gets better. It’s all the things you saw, like what you saw with the deep zoom capability like with the hard rock café demo, its pretty slick, I think everyone who saw that, their jaws just dropped.
Leo- Compared to AIR, it must be harder to develop for than AIR
Steve - Well no, it’s the visual studio tools and expressions, first of all they’re starting to work together on the same binary, the same source code which can be open at the same time, and the price is affordable, as Jeffrey put it its free. And the only place Adobe makes money is charging for the tool, so they have a real problem there.
Robert – the one thing that is pretty cool with Silverlight and .NET is the support for multiple languages. So if you’re a Javascript developer or a .Net developer you’re already know .NET than its fairly easy, whereas for other platforms and AIR specifically you’ve got one language that you have to go learn. In the developer community that Microsoft has right now from .NET they can switch over and start building rich internet applications right away and that’s a big deal.
Steve – You could really feel the energy in the room when they showed some of the tools inside of the. They showed this editing capability inside of IE8, which by the way is completely standards based, and its really surviving direct comparisons with Firefox and the ability to construct and application that employs as a drop down menu choice tracking for ad campaigns when he showed that, whatever guys works under Scott Godfrey, and you could just see people in the audience nod, o yeah now I see where im going to get paid, oh I see something that I can invest in now as opposed to waiting for any of the Google technologies to level of capabilities. There was this visceral feeling in the room that this was not something that was going to be coming two years from now, its as Ray Ozzie says, its going to be something 2 months from now and probably 2 months from now.
Dana - Do you think Google would turn around and maybe buy something that is going to counter this or are they just going to let this space go?
Steve – Well that’s an interesting question. The obvious choice would be Adobe but I don’t think Adobe wants to go for a fire sale. I think they need to wait another year in order to lose another half of their value before Google is going to go after them. But Salesforce which is kind of a stock-force for Google in the enterprise space, they’re pretty solidly embed with AIR and Adobe. I think its kind of like the relationship that Google has recently had with Apple where it doesn’t look like a partnership but it is. Did everybody leave?
Jason – No. We’re stunned.
Robert – Well one thing they’re finishing this week, with Silverlight and the announcement for Nokia and Symbian and the next obvious question is when is silverlight going to run on the Iphone? And that is something else Balmer sort of addressed. And Steve I don’t know if you followed up with anyone at Mix about that question.
Steve – Yeah I have. He kind of threw water on it from a business perspective by suggesting that the developers in the room might not be interested in Apple picking their 30 percent of their product. You know Apple views that as the 30 percent to keep the app door open. I think there is an interesting kind of work around for that problem which is a lot of the apps that might be useful in this context are what is known in the business as free. And Apple doesn’t take any cut of that. So the question is what is the license regarding Silverlight and its use and deployment for a platform that doesn’t charge a runtime. So I think there is a way around that.
Robert – Well yeah along with the fact that Apple doesn’t support Flash, the question is will apple try to not support Silverlight as well or what? I think the whole flash part about it is a bit bizarre, as if I were Apple I would want everyone’s app on my Iphone.
Leo - And apparently not as they want 30 percent of whatever runs on it.
Steve – Well Leo its more than the 30 percent, they want to choke point which ever behemoth they’re trying to turn to their side. You know what they did with the record companies, what they did with AT&T and the carriers. They’re trying to with the runtime, so I think that they probably will support Silverlight before they support Flash.
Leo – So what would be the incentive for them to support Silverlight?
Steve – ugh
Leo – A lot of apps, business apps, a variety of apps?
Steve – Did you look at the Ray Ozzie thing yet?
Leo – No I did not.
Steve – Yeah well if you tried you be part owner of the [inaudible].
Leo – That’s why I didn’t watch it. I’m trying to avoid the reality of distortion, although I trust Ray somewhat.
Steve – Yeah but when there are other forms of entertainment that support [inaudible] you might be co-opted into the situation.
Leo - But would they be web apps or would they be stand alone apps?
Robert – That’s a deployment question than anything.
Leo – Well it is and it isn’t, if it’s a web app then Apple has to include the runtime on the platform. If it’s a standalone app then all they have to do is approve it. I presume when you make a standalone app they’d have to build it into X-code. I think it seems unlikely.
Robert – You still need the runtime call.
Leo – How big is the runtime?
Robert – I think its 4 megs, maybe 3.
Leo – Geeze.
Robert – It says it a ton of times, I should know this.
Leo – Its pretty big.
Robert – Big or Small I would say that’s small.
Leo – Small for a desktop, big for a phone.
Robert – Not to big for the Nokia’s.
Leo – Yeah. Certainly the next generation of phones will handle it. Right?
Robert – I think the more interesting issue with the Iphone is the way that the SDK is only going to support one application at a time.
Leo – I was just going to say that. It looks to me like Apple has memory concerns and so Silverlight runtime won’t be in the back of the phone running constantly.
Steve – Yeah well that really killed windows for a couple of years.
Leo – Yeah. An interesting choice and developers are not happy about that obviously.
Steve – They might not be happy but that’s a hole you drive a truck through because the apps on the server are going to control the interchange. You’re going to see all those apps cooperating on the server side and then there will be one app on the phone. So I don’t think that is the real problem. In fact I think it’s a huge opportunity.
Leo – As long as you’re online
Steve – Well isn’t that the idea of this thing?
Leo – I guess, yeah if you’re building applications on this some people are going to want to run it on the airplane.
Steve – Ahh well, when the airplane has a little wi-fi connection on it then there you go. How far away is that?
Leo – Well lets use it an example of an instant messenger. Clearly its unacceptable for an instant messenger client to log out every time you go to answer the phone or to use another application. Can you maintain that state on the phone even using online?
Steve – It’s the perception of state. When you’re offline and you can cache it on the server and then push it to you immediately when you log back on you don’t even know that you’re offline.
Leo – You don’t even know what you missed.
Steve – Right.
Leo – Yeah that’s a good solution to that actually.
Mike – It just seems to me that watching all the coverage, I was amazed watching Balmer at Cebit the day before he was at Mix or I think it was two days, anyways, and then I think he was at another conference in front of Cebit. So he was at three different conferences for events and he was as cocky as ever.
Steve – You know I’m telling you he has every reason to be cocky. I don’t know what people are smoking when they say that Microsoft isnt in the best position its been in 15 years. Windows 95 what was the 12 years ago, I think that is when it all really broke through.
Mike – Yeah I think the position they’ve been in the past 5 years has been quite defensive and it seems like they’re going on the offensive now.
Leo – Its clear they’re aiming their sites a little better now than they were before. I mean they did once before turning around on the internet and they did the same model with Netscape, they gave away IE while Netscape had to charge, but its still a big challenge and you have some big players out there other than little old Netscape.
Mike – And it doesn’t feel like they’re trying to win yesterdays war again, you know?
Steve – Yeah I think that is the fundamental issue of change is that they’re going very methodically after a scenario that does not require the extinction of everybody else. And that’s why the Yahoo deal is so significant because its like Silverlight is a promotional campaign against the world that they’re serious about playing open.
Mike- Right and then Yahoo would augment their backend service so that they could tie all these Silverlight applications into. Looking at things like the next features of Yahoo mobile are pretty impressive. So there is value in floating inside of Yahoo mobile that will compliment what Microsoft is trying to do with Silverlight.
Leo – So did they announce any of the big partnerships besides Nokia?
Steve – There was an interesting caveat that Jeffery said which was that they are going to have the Silverlight runtime for any mobile device that has an SDK. Well guess what it has an SDK now.
Leo – but there is a little difference as Apple’s SDK requires Apples cooperation before you can distribute it
Steve – [inaudible], They’re in bed and they’ve been in bed a while together, now how does the push sync work? Now show them how they got over that and not one application running at a time problem.
Leo – Well it would explain why Jobs said no Flash. In a way he’s saying no AIR so what else is left?
Steve – There you go. I mean if you look at the SDK and examine what its capabilities are, large functionalities that are exposed like video and it didn’t say video recording but it did say audio recording and are people going to be able to come up with an application over the next two months that allows them to compete directly with the N-95 with some video recording? I think so.
Leo – Yep.
Steve – And although they’re gaining the bandwidth over the EDGE network, ugh pardon the expression bandwidth, they’re allowing wi-fi to work and AT&T is moving into all Starbucks for free and they’re starting in about a month. I think its going to incentivize a lot of wi-fi development in order to take advantage of applications like.. Alright does anybody else want to say anything or should we just wrap this one up?
Mike – Well let me give you a quick overview of Cebit for a minute. But basically European show and mainly German and the noise level went up about green computing. And it feels like green computing is more noise than substance and everyone is just talking about green computing and carbons but in reality nobody seems to do anything about saving carbons. Microsoft was talking about future releases of the software will consume 500 percent less power than they do today. I guess because they will all be running Silverlight or something, I just don’t know. But it seems like a fake end run around virtualization where all these customers are starting to virtualize and they’re not upgrading their servers and the vendor communities are desperately looking for some reason to drive people to upgrade and they’re coming up with green computing, which is kind of weak in the end of the day
Steve - So who are the vendors pushing green.
Mike - Ibm was pushing it, micrsoft was pushing it, I think dell was pushing, now everybody except sun is out there banging that drum at the moment.
Robert - Sun was talking a lot about how much power their servers save, so they went green a year ago
Steve - Yeah I mean those are the economical green guys with their cool very low heat, weren’t they demonstrating the blackbox drops in the parking lot about a year ago.
Mike - The modular container data center
Steve - yeah.
Mike - But it doesn’t seem like any of the customers are responding to that issues. I have yet to meet the IT guy whos has got out of bed and said I care about the environment, he might care about saving dollars on the electric bill, but for the most part the bill is paid by someone in the facilities department and they never see that cost anyway.
Robert – If I were running a network center or a data center I sure would be interested.
Mike - Yeah I think its huge for the top end, the marketplace, but how many Googles are there that drop datacenters everywhere.
Steve - workstation wise I don’t think anybody cares
Mike - Anyways that was the larger theme out of CEBit, but it was just kinda like, it felt like US companies trying to tell our message for European sensibility that may or may not be there,
Steve – well you look at the presidential campaign and the touchy feely issues may play well in a speech, but people are really worried about losing their jobs, losing their healthcare, and losing their house and probably in that order. So if you translate that into IT and what they’re concerned about I think you’ll get closer to what people are really care about, they don’t want to lose their jobs
Mike - That’s what we call budget..
Steve - They’re under a real threat from having it all outsourced to an on-demand server.
Mike - Yeah I mean that is a distinct possibility and it just depends on what the math is and how important it is to run locally.
Steve - I mean they have to become middle managers of negotiations with services, they have to change their job descriptions
Mike - That would make them general contractors
Steve – things that I heard from some of the people at Mix at the engineering and programming level was that I was not aware that some of the people at Microsoft were(intrusion of airport sounds), O come on don’t they understand the Gang. They have no respect for genius.
Mike – You’re really at a bus station aren’t you?
(Laughter)
Robert - They really put you in the executive suite
Steve - Microsoft has grown from 60,000 people three years ago to 85,000 this year.
Leo - Wow
Steve – Yeah, So there is this huge fight going on, there is Ray, Johnson and Guthfree up at the top. Then there is this huge French warfare going on at the middle manager level where everybody is trying to find out what the plan is. This one programmer was talking to me about that and he said “you know I want to know what the plan is” and I suggested to him that not anyone knew what the plan is, not at any level, that there is no plan.
Leo -And you call this a company that has been in its best shape its been in in years, huh?
Steve - Well
Mike - How can I make Google work since there is no real plan there.
Leo – Yeah the Google plan is..(interrupted)
Steve – Alright Leo argue with me
(Laughter)
Steve - I’m going to vanquish you.
Leo - you will vanquish me. I’m sure, I’m terrified.
Steve – Fine, Go ahead.
Leo - I think Microsoft is the king of over promising and under delivering. While silverlight is out, I don’t see many other things coming out the door. We’re still waiting for surface. I don’t know if Microsoft really has the will. When you say they’ve gone from 60 to 85,000 it sounds like they’re bloated, overweight, directionless and yes this is the new flavor of the month, o good we’re going to be big in web apps. But I think it’s a lot of talk till they actually do something.
Steve - Ok Robert are you still there?
Robert - Yeah, they are doing something. It’s not like the Silverlight thing they just announced it the other day.
Leo - I know, I agree. I think Silverlight, that’s the deliverable. I haven’t gone to any websites yet that have demand I install Silverlight and I wonder if consumers will install Silverlight. We’ve spent a lot of time telling people don’t install applications from the net. Are they going to build it into the browser?
Robert - Well lets face it Microsoft isn’t in a rush to put their old business out of business. They’re not going to rush to this stuff, they’re just going to drag along and appear as if they’re a participant but really what’s in their best interest. They need to time this
Steve - Well I don’t think that’s true anymore, I think we’ll see announcements and actual change in their office space, but its true that right now, what they have online, their office live product, is not that much
Leo - Its ghastly, and you’ve got these fiefdoms inside of Microsoft fighting it tooth and nail. If you work in the office division at Microsoft, this is the last thing you want to see succeed.
Steve - Yeah except for the fact you’ll notice Jeff Rakes is gone, Charles Fitzgerald is gone, Alton is gone. The old guard is gone. Now does this mean there is a new guard yet, but there are people who are, you know Scott Godfrey 8 years ago, I was at an offsite with Eric Rogers who was the previous golden boy, the next Bill Gates who never seemed to get there. And Godfrey was showing this thing called ASP.NET which was basically taking the IIS server stub of server code and applying it to what has become Zamal and the entire UI over XML infrastructure of both the tools and the delivery of pages to the web. And he was showing this as a plug in that wasn’t even yet built into visual studio. And this guys was like an incredible breath of fresh air, that was 8 years ago, now he’s running the company. On a practical basis, its Scott Godfrey and he has his team of people I’ve never heard of who are out there demonstrating stuff and by the end of all those presentations, it wasn’t flashy in the sense that, yeah the Hard Rock Café thing was flashy and the but the attention to detail and what they showed at the very peaks of this architect. It become very clear that this thing is done and its rolling out very soon, like two months.
Robert - So Steve have you been at the Mix show?
Steve- Yeah that’s where I’ve been.
Robert - I’ve read what been reported but what’s between the lines. What’s your take away in terms of your sensibility of what Microsoft it up to rather then the pronouncements from the event?
Steve – Well it’s kind of what we’ve been talking about and I am really trying to pick a fight with Leo but..
Leo – Alright, alright you want me to continue?
Steve – Yeah I do
Leo – Its clear Microsoft is at a turning point. I mean there is no question about it, the question is can they make the turn. It’s a difficult turn to make, the only reason they have time right now is that there are no strong contenders stepping up to saying I’m ready to move in. Google’s is the strongest contender and it doesn’t really seem that focused yet. Maybe when we see android come out and whatever they’re doing with Open Social. But right now they have put anything strong enough out, I mean the Google apps are not going to knock Microsoft Office off the pedestal. But I don’t think Microsoft has a lot of time. Right now they better step up and come to the plate, and now I’m convinced that Silverlight is enough.
Steve – Ok you can’t filibuster.
Leo – Alright, alright I’m done
(Laughter)
Steve – Ok, so I mean you’re making my point, I think. Which is what do they have? Somebody asked the question before “where are they going to go, Google, are they going to do a deal with adobe? Doesn’t look like it does it?
Robert - No they’re throwing stones at Adobe.
Steve - So what happened? To me Google is becoming, rapidly, a stopping force in turns of the on-demand side of office applications for Microsoft, not the other way around.
Robert - I think it’s a paper tiger right now and I’m a little disappointed. I think Google hasn’t put up a very credible front.
Dana - Well we’ve been in this discussion before, the question is if they’re moon the giant before they’re read or if they want to come up organically through the grassroots individuals and line of business people and do an end run around IT. So are they being coy intentionally or are they being coy as an array and a lack of strategy?
Steve - Well I think the moon the giant things was bullshit from the beginning. O and by the way on this show I can say bullshit and I don’t have to edit it out.
(Laughter)
Leo - And we left a few bullshits in I believe
Steve - O you did?
Leo - Yes just for your sake
Steve - Well I did like 4 so maybe..
Leo - We cut 2,Its like the X ratings in the movies, you’re allowed 1.
Steve- Right its like NYPD Blue.
Leo - Yeah, butt shot.
Steve - Alright it was really pissing me off. I think that when Schmidt was talking about “there is no way we’re going after Microsoft and its fabulous office environment”. While precisely at that moment they were releasing another module of their anti-office campaign. I mean it was just ridiculous. Do you think that Microsoft was up there and saying I don’t know what those guys are doing, but they’re definitely not coming after us. No.
Dana - We must be safe. Yeah pay attention.
Steve – Yeah Eric Schmidt is, we know how to beat Eric, we’ve beaten Eric for 10 years.
Leo - I think that was the one thing I got out of Mix was that Balmer very clear committal to going after Google. That Google is now seen as the enemy.
Steve – But he correctly identified Microsoft on the online space as the underdog
Leo - Yeah, that’s important
Steve - its never been said by somebody at that level, I mean Bill Gates still wont say it.
Leo - You know I’m going to wait and see position, I would love to see Microsoft step forward and do some amazing things, something more than making Robert Scoble cry. So far it’s a lot of words. Silverlight is very cool looking, I should would like to see what they’re going to do with it and Id like to see what their strategy is to get people to implement it. Is it going to come out in the next version of windows? Are they going to force a download of it on all the windows platforms?
Steve – The next version of Windows is the install and is the larger and more complete install of that. You don’t need that if you have windows.
Leo - Right, so who is this saying that then? Everybody not running windows?
Steve – I mean I would like saying that at the Mac blog, that’s where they need to go in order to get my share.
Leo - No, no, no, no, no its aimed at everybody, there is no vista experience that allows you to have rich internet application without Silverlight or without flash. So it’s not aimed at the Macintosh, its aimed at everybody.
Steve – I think rich internet application is just as much of a phony issue as mooning the gorilla, I mean come on.
Leo - I don’t see people standing in line for rich internet applications
Steve - Exactly, but I do see people standing in line for, If you love Gmail which I do, and if you love your IPhone which I do, and I’m standing in the elevator and everything goes off and I’m banging away and twitter is broken and nothing is working and I feel like I’ve been cut off from my heorance blog. If there was an alternate veil over platform that cached all this stuff intelligently and basically woke up and isolated itself and did the right thing. In other words, rich in the way the services need to be rich, that is the part if it were at a good cost, i.e. free that I’m going to go for it.
Leo - I think the opportunity for Microsoft at this point is purely middleware. I think is going to happen is that not company is going to dominate the desktop. They’re going to provide the pathway, Silverlight will provide a pathway, I don’t think it will be the only pathway and I don’t think Microsoft will be the behemoth it was in 10 years. I think it’s going to be a middleware company, an SAP or an Oracle company. It’s not going to be in the forefront anymore. You’re going to have a thousand little companies like twitter doing all the work for what people want to do.
Steve- Right and in that kind of an eco-system, it’s like what happened after broad bill. When Hollywood studies first arose it was like this country, a lot of people at the top doing better and better, while the rest of us we’re struggling to get into the theater. Right, we were sneaking into the theater. Once Microsoft switches to an authority model, where they have to play. I mean there was a phrase in Ray Ozzie’s talk which I highlight in my commercial coming first Kiwi blog post called the “The Power of Choice”. Now what do you think he is talking about there?
Leo - The power to choose Microsoft.
Steve - Yeah
Leo - Does he really want choice? I don’t know if he really wants choice.
Steve - Alright, laugh it up, answer the question.
Leo - I don’t know you tell me what is Ray Ozzie talking about.
Steve - Yeah what is he talking about?
Leo - He doesn’t really want choice, not if he’s working for Microsoft. He wants to dominate, he wants to be the sole player.
Steve- But of course they want to dominate, but its how they get there.
Leo - They cant. They can dominate in middleware and possibly in server systems, but if you accept that the operating system is on the way out and that the internet is the operating system.
Steve - Yeah if the operating system is now just a layer below the layer of the switching between social networks is driven, who owns that layer, mainly the runtime is the winner.
Leo - Right. Well Microsoft is very likely, I think that the one place where they’re likely to play and can play strongly.
Steve - ok well if you want to call that middleware than we’re in an agreement.
Leo - Yeah, Yeah.
Steve - And the part of small business where they control all of the attention of the universe. And I’ll take 10 cents of every transaction.
Leo - If I’m Microsoft that is exactly where I want to play, that’s exactly where I want to play. It may not be sexy and I think Microsoft has perhaps some people that want to be a little more foreground than that but that’s the place they can continue to play and they own it by default, so they might as well stay there. It’s not as sexy as Google.
Steve- I like this argument as its going in my way.
(laughter)
Leo - Well I was apparently never opposed to it.
Mike - well wasn’t it part of the objective of Mix to shift zeitgeist away from Google in the end they apparently didn’t succeed.
Leo - I don’t think so
Mike - The IPhone announcement came in and knocked them on their butts.
Leo - Absolutely, they need to settle for being a great little company, running in the background.
Steve- You guys are dreaming. You think they were knocked off the front page of techmeme, so what.
Mike - That’s not all, look what impacts the stock price. Did Microsoft do anything to its price with Mix? I don’t think so. Always there are downward drafts in the market generally but.
Steve- The stock price you could nail to the wall. Its fluctuated not at all in 10 years.
Mike - That’s true its been bouncing around staying margin for 3 or 4 years. That’s not a good sign.
Leo - I think you got Spain and Portugal. I think Microsoft says we’ll take the middle, Apple says we’ll take the content, we’ll be the people delivering the content and we’ll take our little slice of every piece of pie there.
Mike - And Google will take the business model which is advertising.
Leo - Absolutely, and Microsoft can’t fight on all those fronts, they have to give up on a couple of those fronts.
Mike - and Oracle will start pounding on the enterprise sites.
Leo - And that maybe frankly that’s who Microsoft should be more worried about are those other middleware providers, those guys are your real threats.
Steve - Who are they?
Leo - Well I don’t know SAP, Oracle, IBM, I mean the other great little companies.
Mike - And it’s not just the companies it’s the whole model of enterprise computing which is well into open source, well into moving into these distributed stacks and virtualization. And the whole model is moving away from anybody want to have the single stack value.
Leo - Good point
Steve – Ok so guys seem to think that Microsoft and Apple are two separate types of companies. Maybe legally but the analogy is baseball team, Microsoft’s the New York Yankees and the Apple’s the Kansas city A’s.
Mike - Who?
Leo - The Kansas city Athletics. Steve are you time tripping at this point. What exactly are.
Steve - I’m going back to 1961 when.
Leo - When everything was simpler and better.
Steve – when things were a lot better.
Leo - The plug, that god damn plug compatible hadn’t come along.
[InAudible]
Steve – It’s like having Ray Ozzie batting 8th. I mean come on. So here’s what happens look at the announcements yesterday from apple, “O by the way we’re licensing ActiveSync”. In other words, Microsoft is now finally amortizing their end run around their patent that RIM has on push email. Right, so nobody has successfully done that yet and all of a sudden it’s going to show up on the IPhone in 2 weeks.
Leo - RIM’s big announcement is that they will be having Will I Am doing a social network on the blackberry platform.
Dana - I would point out that the Yankees in the late 50’s and early 60’s as powerful as they were lost to a much inferior Pittsburg Pirates.
Yes now there are baseball nerds, nobody warned me about this.
Steve- Pat [InAduible] ruined my 13th birthday.
Dana - So that brings the question why didn’t Microsoft make a deal with apple that allows exchange to replicate out to the Iphone.
Leo - You see where the future of the smart phone is.
Steve - And Apple is beyond the front of the bow of Microsoft. They get us all hooked on all these services and then they come out and clone it.
Leo - I’m surprised to see Apple want to go into this enterprise space so big. It makes sense, you’re going to sell more phones.
Dana - Apple has had enterprise lust right from the start.
Mike - This might get Apple back into the enterprise.
Leo - But its never succeeded. You know I thought long ago they seeded that space, but maybe not.
Mike - Remember that commercial in 1984 where, they were going after ibm then, but Microsoft got there.
Leo - Yeah
Steve - Ok, so now we are agreed that Apple is not going to be taking the content. But what I think they are is a disruptive force necessary to make it easier for large companies to make the transition from paradigm to the new one.
Leo - I would just like to point out though that this conversation 3 years ago the word Apple just doesn’t even come up. The fact that Apple is even a player in this is a major turn around.
Steve - And you know how is responsible for that? Google.
Leo - How so?
Steve - By creating the application that allowed you to be able to throw office away, they removed application barrier from the Mac.
Can I ask a question? Has anybody thrown out the number of people who have thrown away Microsoft Office in favor of Google Apps? Is that actually happening?
Steve – I did about 2 and half to 3 years ago.
Leo - Really?
Dana -I wouldn’t say people are throwing out Microsoft Office but they are making a lot more use out of Google Apps as an alternative.
Mike - They’re using web apps and email to do most of their documents anyway. What do you need a word processor for, its embedded into so many different things and in some many different ways.
Leo - That I would buy that you don’t really need one.
Steve - What do you need a doc file for?
Mike - I mean you might need a spreadsheet file
Mike - but if you want to share something with people, it’s a blog authoring tool or if you want to send something, its email.
Steve – Right
Dana - Hey if we’re getting to the end to start with the beginning. 14 minutes ago digg put out a statement saying that they completely died and that they’re putting the markers up.
Mike – Yeah this is becoming a 6 month cycle now. Techcrunch announces it and digg denies it.
Steve – I’m telling you when they come back and they’re saying they’re really going to do this for a $100 Million they still wont do it because you can screen scrap Digg and put it into a freeware application.
Leo - Well pretty much demonstrate it that you can do it for a million bucks and who needs to buy Digg.
Mike – it’s a feature, not an application or destination.
Leo - Unless you can convince people that the Digg audience is worth something, but I’ll be honest if you’ve ever read the comments on Digg, I don’t know how much that audience is worth. I don’t really know about the page views on digg, I even scrap it, I just look at the feed.
Steve – Well Leo you’re a big page view monster, what about the people who call up and listen to your stuff?
Leo - What about them?
Steve - you love them all equally.
Leo- I do and I think they’re higher quality then the Digg crowd to be honest.
Steve – Boy that just like Johnny Carson saying “you’re a great audience but last nights audience.
Leo - We’re awful! I never had that audience. It’s a separate audience and frankly I don’t know but I think its skews young and I wouldn’t pay $200 million for. Maybe Rubert Murdoch wants it, I don’t.
Mike – they just got page views that their generating, that’s it.
Leo - And Jason said 10 million dollars a year in advertising, I don’t know, I’ll take Jason’s word for it but that’s nothing to fall over your feet over running to pick them up. I wish the best for them, I mean I hope they do get bought, and get bought for $200 million and maybe then Kevin would buy me dinner.
Steve – Well I think its bullshit and will continue to be bullshit because they have no barrier to entry.
Leo - I agree, I agree. And they have nothing of value.
Steve – My problem is that with all those Digg like locations, I want without having to go through the conversation around them. I just want to know what people are interested in.
Leo- And that’s the RSS feed and thats the one mistake Digg made was that the RSS feed, feeds directly into the link instead of to Digg’s front page. So you don’t even need to go to Digg at any point you just need to go to its RSS feed. And you get the conversation and you get the content without selling your hand in any way.
Steve - Ok lets go around the table really quick as I have to get on this plane here. Who’s still on the call? Jason are you still hiding there or not?
Leo - he’s feeding the dogs. He’s trying to get on Valleywag.
Steve – Alright Dana last thoughts
Dana – I think that Microsoft and Google desperately need each other and that Google wouldn’t be as strong without Microsoft and that Microsoft wouldn’t as strong without Google so there is almost this tag team, ying-yang thing going on. I don’t think they’re so much competitive but as different sides of a coin and I wouldn’t expect one to go away or another to go away for 10-12 years.
Steve - Mike
Mike – Every action creates an equal and opposite reaction and Google is not going to sit by and let developers know Microsoft wants them. Watch what Google is going to do next.
Steve- Yeah but what can they do?
Mike – Well they bought a small little programming company and they have their own programmers and they might buy Adobe or who knows they might take over Curl or something. I don’t know the answer to that, but they have to do something.
Robert - Well I can add to that instead they could out due Amazon and instead of just putting up database and run time they could put up tools and let the developer develop the [inaudible] on your cloud.
Steve – Well its not developers, its users that they’re trying to buy.
Robert - It’s a relationship.
Steve - Leo
Leo - Silverlight is a nice demo, but I’m not drinking the kool-aid I don’t think Microsoft has yet to show us anything over the past 3 years, this is a flop. I don’t think Microsoft has anything in there.
Steve - Well I agree this is a flop, but this is my point in spades.
Leo - You think Silverlight is going to save Microsoft, if that’s all they got they better come up with something better than that.
Steve - Silverlight is the glue that holds together their dominant position on the consumer computer. As long as they run equally well on the Mac and eventually on Linqs, they’ll eventually port the operating system to the internet operating system. Its going to be months not years.
Leo - Its Al Joelson singing you aint seen nothing yet.
Steve - I’m telling you if you open your eyes and sit back and relax they may impress you and you’ll enjoy it.
Leo - I think you’re about to get on a plane aren’t you? You sit back and relax and enjoy the plane food.
Steve - Robert are you still there?
Robert – I am still here.
Steve – Ok so you have to speak up and hurry up.
Robert – So if Google, and Google will. In order to compete in the developer space Google will have to acquire big and got some hard work ahead of them. I just don’t see them doing it themselves and doing it internally. So I think it will be a lot harder than other on this call think.
Steve – Alright, well Leo I want to thank you very much for returning the favor after me coming on your show and I think you’re better on my show then I am on yours.
Leo – I disagree, it was great fun and I thank you for letting me on.
Steve – I hope you’ll do this again in the future.
Leo – Sure.
Steve – Ok, this is Steve Gilmore from the Gang saying see you next time if there is a next time, Bye-Bye.
