Please ensure Javascript is enabled for purposes of website accessibility

Microsoft Is a Fad

By Rick Munarriz – Updated Apr 5, 2017 at 5:30PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

If Ballmer thinks that Facebook is a fad, what must he think about the Zune?

Nice going, Steve Ballmer.

After suggesting that social networks (like ad partner Facebook) might be passing fancies, Microsoft's (NASDAQ:MSFT) energetic CEO is either a shrewd negotiator -- or an idiot.

"I think these things [social networks] are going to have some legs, and yet there's a faddishness, a faddish nature about anything that basically appeals to younger people," Ballmer told Times Online on Monday.

Legs? Faddish? Younger people? Oh, snap! Did Ballmer just call Facebook the next Heelys (NASDAQ:HLYS)? Don't tell me that he just relegated News Corp.'s (NYSE:NWS) MySpace to the status of a rusting Razor scooter. 

Aren't many of the software giant's entertainment appliances, like the Xbox 360 and the Zune, turning to social networks to woo consumers into stickier relationships with Mr. Softy?

And what's wrong with appealing to young people? (My Foolish colleague Tim Beyers was just discussing why IAC/InterActiveCorp (NASDAQ:IACI) should buy the social networking/virtual world of Second Life.) Weren't folks like Apple's (NASDAQ:AAPL) Steve Jobs and Microsoft's own Bill Gates once just sharp kids toiling away with the "faddishness" of personal computing? And don't even get me started on what grad-school duos were cooking up when they launched Google (NASDAQ:GOOG), Yahoo! (NASDAQ:YHOO), or even Hewlett-Packard.

I'm hoping that Ballmer's comments will turn out to be a negotiating tactic. After all, Facebook's CEO is in his early 20s. If there is any truth at all to last week's The Wall Street Journal story -- citing unnamed sources that had Microsoft looking to buy a small stake in Facebook, valuing the social-networking site at $10 billion to $15 billion -- fad rhetoric like this may prompt Facebook to cash out before it gets too greedy.

Sure. And if you believe that, I have the $1 billion that Yahoo! supposedly offered to swallow Facebook whole last year. Facebook turned it down, and even a pessimistic valuation of Facebook proves that Mark Zuckerberg made the right call at the time.

Facebook has gone on to grow faster than other social networks, closing the gap with market leader MySpace. Embracing developers by opening the site to lucrative widget-concocting programmers has helped Facebook claim the top spot on every brand marketer's to-do list.

Tsk, tsk, Ballmer. Playing the fad card isn't going to work with someone whose arrogance paid off perfectly last year. It's also no way to treat and ad-serving partner

If Ballmer thinks that Facebook is a fad, one can only wonder how quickly his mental clock must be ticking on Zune's 15 minutes.

Other Facebook snaps:

Yahoo! is a Motley Fool Stock Advisor recommendation. Microsoft is a selection in the Inside Value newsletter service. Separate the great stocks from the faddish ones with a free, 30-day trial subscription.  

Longtime Fool contributor Rick Munarriz wonders if loners embrace social networking. He does not own shares in any of the companies mentioned in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool's disclosure policy sings like a bird.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Microsoft Corporation Stock Quote
Microsoft Corporation
MSFT
$237.92 (-1.27%) $-3.06
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$98.74 (-1.40%) $-1.40
Apple Inc. Stock Quote
Apple Inc.
AAPL
$150.43 (-1.51%) $-2.31
Twenty-First Century Fox, Inc. Stock Quote
Twenty-First Century Fox, Inc.
FOX
Match Group, Inc. Stock Quote
Match Group, Inc.
IAC

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
339%
 
S&P 500 Returns
109%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.