Daily Archives: May 26, 2010

Microsoft Loses Patience with China

It wasn’t too long ago that Microsoft’s Craig Mundie, the company’s chief research and strategy officer, offered a public lecture to Google on how it should have been more patient and flexible in its dealings with China.

Mundie’s commentary was condescending, patronizing, self-serving — and an utterly obsequious ploy by Microsoft to curry favor with Chinese authorities. Rather than chortle at Google’s apparent misfortune, Microsoft should have kept its counsel and stuck to its coding.

Now we learn that Microsoft’s own patience with China is wearing thin. Earlier today in Singapore, Microsoft CEO Steve Ballmer said China’s weak enforcement of copyright laws has hurt his company’s revenues and compelled it to focus on other markets in Asia.

An Associated Press (AP) report containing Ballmer’s remarks also noted that China — destined to become the world’s biggest computer market this year when it overtakes the U.S. — accounts for 15 to 20 percent of global PC sales, but just one (as in 1) percent of Microsoft revenue.

Said Ballmer:

“Intellectual property protection in China is not just lower than other places, it’s very low, very, very low. We see better opportunities in countries like India and Indonesia than China because the intellectual property protection is quite a bit better.”

When Ballmer returns to head office, he might want to share that insight with Mundie.

Facebook Croons New Tune, But Song Remains the Same

Bruce Nussbaum, a former assistant managing editor at Business Week who now serves as a professor at Parsons School of Design, makes the argument that some of Facebook’s current privacy-related woes stem from its inability to remain attuned to cultural changes affecting its audience.

I’m not sure whether I buy the argument in its entirety, partly because Facebook long ago left behind its singular focus and dependence on college and high-school kids. Still, two brief sentences in Nussbaum’s blog post at Harvard Business Review are undeniably true:

At the moment, it (Facebook) has an audience that is at war with its advertisers. Not good.

No, it’s not good. But, as I argued early last year, Facebook was destined to be in conflict with its audience. The outcome was inevitable, resulting from Facebook’s inability or unwillingness to be transparent about the specifics of its business model and its exploitative relationship with its audience.

Facebook was neither forthcoming nor honest. Then, as now, Facebook continues to play a cynical game with those who use its service. It continues to lead them to believe they incur no downside for using a nominally free service. Then, as subscribers drop their guards, Facebook exacts a price, furtively dismantling privacy protections and trading on the sorts of sliced and diced demographic data that advertisers crave.

Now, as Facebook goes through another privacy overhaul, promising to make amends for what has become a pattern of deception and dishonesty, subscribers to the service ought to recall a hackneyed admonition about violated trust: Fool me once, shame on you. Fool me twice, shame on me. (George W. Bush emphasized a variation on this theme, you might remember.)

The truth is, Facebook can’t change. It’s too late. It’s caught in the bind I described in that blog post back in early 2009. Still, even though Facebook is ensnared in a trap of its own design, its audience doesn’t have to go along for the ride.