Sticking your neck out

Microsoft CEO Steve Balmer will never be accused of knee-jerk, shoot-from-the-hip declarations. Consider his comments to BW about YouTube, Facebook and all the Web 2.0 developments.

Q. What do you make of the deal between Google and YouTube?

A. [You've got to ask] could Google do whatever it is they're hoping to buy without paying $1.6 billion? Is YouTube really some permanent, long-term thing, or is it a fashion? I'm not saying it is a fashion. But every time we do valuations, I wonder if we can afford to keep this hot for 10 years. I'm sure somebody at Google has got to do the same analysis, because even $1.6 billion is more than 1 percent of their market cap.

[CUT]

Q. You're clear as a bell on the YouTube valuation…

A. No. I'm not saying it is overvalued. I'm not trying to say that. It depends on a set of factors. I'm not saying I wouldn't write a check for that amount of money. I might.

Q. Really, even though there's no identifiable business model?

A. It is one of those things where you have to think. You can't punt either way. If you're asking me if I would offer $1.7 billion if no one else was offering $1.6 billion, no I wouldn't do that. On the other hand, if somebody is really going to offer that amount of money, you cannot reject these things. And I'm not saying that we are.

Take Facebook. Every month and a half, there's a rumor that it's going to get sold. What was the last rumor, a billion bucks? Is it worth a billion bucks? It hasn't proven to be worth a billion bucks. But it also hasn't refuted that it might be worth a billion bucks.