Microsoft sniffed at “acquiring YouTube’s technology”
This little tidbit from the Journal’s day-one story on the Google/YouTube deal caught my eye:
A Microsoft spokeswoman said the company “evaluated acquiring this type of technology several months ago” but decided to build its own service, a test version of which opened recently.
It may be foolish to read too much into an unnamed spokesperson’s boilerplate wording, but it is unwittingly illuminating.
YouTube’s “technology” is smart: the company made a good bet on making posting videos really easy — it did for Web video what AOL did a decade ago to help people get online. But the technology itself is something that Google, or Microsoft, could duplicate for a tiny fraction of YouTube’s price tag.
Google traded its stock not for YouTube’s technology but for its massive and growing community of users. That Microsoft would describe the deal as “acquiring technology” is an indication that it’s still thinking like a packaged-software-goods company.
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October 13th, 2006 at 12:15 pm
Not just that Scott. As a former Microsoft employee myself, I’d like to add that they have a very strong predisposition to building software in-house as opposed to finding existing solutions and reworking them to fit. (This is ironic, given the founding history of the company being built on purchased code.)
Which is not to invalidate your point, but to emphasize it: that they were worrying about how good the code is, is to have completely missed the point of software-as-service. Blake Edwards of Windows Live keeps blah-blah-blah-ing on about building services instead of software, but it seems he still is thinking in terms of software-as-a-service-thing-to-sell instead of capturing repeat users by whatever means necessary to guarantee the very revenue stream that software-as-service lives and dies by.
All that said, it’s also a possibility that the founders of YouTube were patently against any sort of acquisition by Microsoft (not unrealistic) and this is just MSFTs way of soft-pedaling the rejection.