Why Microsoft Won’t Ever Really Compete in Social Media

Robert Scoble has an interesting post about Microsoft’s Steve Ballmer and his attitude about social media. It’s a good post, worth reading, but here’s an interesting point that Scoble misses.

Microsoft won’t compete in social networking or social media for the same reason that:

• AT&T didn’t compete in cell phones (they had to buy their way back in the game);
• IBM didn’t compete in software or desktop PCs
• Coke didn’t invent energy drinks (and can’t come close to catching Red Bull, despite billions…)

Here’s the issue: Fragmentation in every industry leads to new branding opportunities, and the pre-fragmentation leader usually is not the post-fragmentation leader. This is all said brilliantly in The Origin of Brands by Reis and Reis.

That’s why the big ad agencies won’t be good at social media. Neither will the big PR firms. (How many messes will Edelman make for Wal-mart in social media??). It’s not that they are not smart people. They are. It’s just that they are colored by their day jobs… Natural. But watch for big social media agencies in a few years… That’s what I’m thinking anyway…. Thoughts?