Monday Note

by Jean-Louis Gassée

The eighth installment of the Wall Street Journal’s annual D: All Things Digital conference was held last week outside Los Angeles, your author in attendance. You’ll find full coverage of the proceedings here, and the speakers list here; it was an impressive roster, du beau linge, as we say in France.
Staged as a series of interviews conducted by Wall Street Journal high-tech guru Walt Mossberg and conference co-producer Kara Swisher, D8 brings us “straight-up conversations with the most influential figures in media and technology.”
On the D8 site, the one-hour fireside chats are mercifully chopped into digestible ten-minute segments. The D8 audience is limited to 500 people, a cross-section of high-tech execs and entrepreneurs, VCs, media investment bankers and attorneys, a few Hollywood types genuinely involved in bleeding-edge tech, some pained-but-valiant old-media reporters, and a handful of bloggers who are able to pay the stiff conference fee ($5K). Discouragingly, there were very few Europeans—discouraging when so much of our future is fought and decided within a five-mile radius that encompasses Palo Alto, Cupertino, and Mountain View, where HP, Apple, Google, and Facebook are. Below are my notes from the show about three fixated leaders: The two Steves (Jobs and Ballmer) and Mark Zuckerberg, CEO of Facebook.

Steve Jobs

Steve Jobs opened the conference with the only interview of the night. True to form, he tells us Apple will continue to design and create devices that provide the best user experience. He doesn’t care what the pundits say, he measures the win/lose proposition one customer at a time. That’s why he’ll spare no effort, avoid no fight in preventing anything—carriers, enterprise sales, Adobe—from adulterating the relationship between Apple and its customers.

The numbers support him—the iPad sold 2 million units in its first 60 days on the market—and the customer satisfaction surveys (JD Powers and Consumer Reports) validate his strategy. With the iPhone and iPad, Jobs has envisioned a new genre of very personal computing (see the March and May 2010 Monday Notes on this topic).

With this coming week’s Apple Worldwide Developer’s Conference, a new iPhone, and more goodies around the corner, Apple’s future looks secure… unless you start worrying about the side-effects of the unrelenting focus on the device and the user experience. Has this selective attention lead Apple to neglect the Cloud and Social Networking? Has Jobs paid enough attention to the ways in which the Google and Facebook Cloud applications could one day control his destiny?

The Other Steve

The other Steve, Ballmer, was also in fine form. I don’t admire everything he’s said and done, but one must bow to his unrelenting, dynamic, articulate, witty, and often thoughtful ways of preaching the Microsoft gospel: Everything is a PC. If it’s got a processor, some memory, and a display…it’s a PC. You can call it a tablet but, to Ballmer, it’s merely a form factor. The iPad? Ha, try taking notes with one. There were some admissions: Yes, Apple had a great quarter, Google is a behemoth, Microsoft missed a cycle in the mobile device space…but we’ll be back next year!

Ballmer masterfully delivers all this with the powerful voice of the Harvard football coach he once was—his orders must have easily carried across the field. The enunciation is fast and precise, the sentences flow without hesitation, the body language exudes authority and friendly camaraderie although with a hint of potential retribution. One can easily imagine him going head to head with the CEOs and CIOs of the largest corporations and PC manufacturers in the world, reminding them what would happen if they were no longer treated as Most Favored Clients. (The same intimidation evidently applies to the troops inside Microsoft.)
But articulate and masterful doesn’t necessarily mean correct.
I’m not convinced that an intelligent man like Ballmer believes what he says. I hope he doesn’t, otherwise Microsoft is in trouble. Mocking Google for having two operating systems, Android and Chrome, is boneheaded. Chief Software Architect Ray Ozzie, onstage with Ballmer, gently tries to take the jibe back: Android is for phones, Chrome is for the future in the Cloud. When asked about Windows 7 and Windows Phone 7—systems that are related only by name—Ballmer admits that Microsoft also has two OS’s, but unlike Google’s, Microsoft’s have “coherence”.
As for dismissing the iPad and other tablets as simply PC form factors, Ballmer ought to think again. Isn’t the PC-centric view precisely the reason why a company with Microsoft’s resources has repeatedly failed at creating a tablet? The iPad isn’t a Mac Tablet, it’s something different. That it has been freed from the “like a PC” entanglement is one of the reasons two million iPads have been sold in its first two months.

Mark Zuckerberg

Mark Zuckerberg is 26 years old—30 years Ballmer’s and Jobs’ junior—and the CEO of Facebook, one of the most amazing companies of the past two or three decades. For him, the Web revolves around people and their connections, the famous social graph. Everything else either doesn’t matter or supports his view of a Web of connected users.

Facebook is a fast-growing company with close to 500 million users. The technical infrastructure for such a huge business runs remarkably smoothly. Think of the billions of photos that are uploaded every day, or the constant upgrades and refinements to the product and its services. It appears that Facebook has learned some lessons from Google about the back office and the constant evolution of Cloud apps, and other lessons from Apple when it comes to keeping the UI clean and, I might add, the slide presentations elegant. This isn’t the work of a bunch of amateurs.

Some critics suggest that Facebook should get a ‘‘real’’ CEO because Zuckerberg can’t possibly be trusted with the running of this important company. Others claim that Zuckerberg is heavily coached—although they stop short of calling him a puppet CEO whose strings are pulled… because pulled by whom? Yes, the Facebook board includes powerful VCs from Accel and Greylock, a serial entrepreneur and now investor, Marc Andreesen, and a mover-and-shaker from Washington and Google as COO, Sheryl Sandberg. (The full exec bios are here.) But if we take a little deeper dive into Mark Zuckerberg’s bio, from Wikipedia, we see that the fellow has no lack of native talent:

Zuckerberg…started programming when he was in middle school. Early on, Zuckerberg enjoyed developing computer programs, especially communication tools and games. … At high school, he excelled in the classics. He transferred to Phillips Exeter Academy where he immersed himself in Latin. He also built a program to help the workers in his father’s office communicate; he built a version of the game Risk and a music player named Synapse that used artificial intelligence to learn the user’s listening habits. Microsoft and AOL tried to purchase Synapse and recruit Zuckerberg, but he decided to attend Harvard University instead…. In college, he was known for reciting lines from epic poems such as The Iliad.

None of this means that Zuckerberg is the best CEO in the Western world, Nbut I think his critics are mislead by his occasionally infelicitous public speaking manner, for which he is often panned. Somewhat true—I, too, have been struck by the gap between the quality of his public delivery and the depth and relevance of his vision. True, but not relevant.

The public speaking awkwardness was in full display at the beginning of his D8 interview. Grilled on the latest privacy controversy surrounding Facebook, he didn’t sound convincing. He sweated so profusely that Kara Swisher asked him to take his overly-warm hoodie off.
But when it came to his views of social networking, his company, his team, his management style, and his sense of the future, he found the right gear and zoomed off. Of course he wants the company to make money, tons of it, that’s the score in the real world, like it or not. Of course he uses our social graph, our connections, our behaviors to target advertising.

Zuckerberg is somewhat disingenuous when he says he won’t release our data to advertisers. He actually does better than that: He keeps our data while using it to target advertising on advertisers’ behalf. The advertisers tell him what they want and he delivers their ads to the chosen targets. He takes their money but doesn’t hand out our details. This is better than the old practice of selling qualified leads.
Zuckerberg realizes that the privacy complaint storms have had little effect on our use of Facebook. For many users, Facebook is the place where they start their day on the Web. This starting point could become a tollgate as Facebook continues to offer more services. Mail? Skype-like audio/video chat? Payment systems? Something like Craigslist? Let’s ask Zynga what they think of the tollgate. Although the Facebook press release doesn’t say how much the “5-year strategic relationship” cost Zynga, others are happy to help: The number is 30 percent of revenue gathered from game credits.

I don’t see too many shortcomings when comparing Zuckerberg’s view of the Web as people –and-connections with Google’s foundation on page links. If Facebook continues to grow its number of users and its breadth of services, the company could find itself in a commanding position few of us could have imagined five years ago. What will we (and Google, Microsoft, and Apple) say when Facebook reaches a billion users?

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