Wow, I go to lunch with my parents and the entire world shifts due to a Wall Street Journal report that Microsoft may buy part of Facebook which would value Facebook at $10 billion or so.

Too bad that Microsoft’s management didn’t listen to Jeff Sandquist and others two years ago.

Funny, you know Dave Morin? He works at Facebook on the app platform now but used to work at Apple. He told me that he tried to get Apple to pay attention too. But got frustrated with Apple’s inability to get Facebook. So, he left to join Facebook.

What’s funny, he told me, is now a good percentage of Apple employees are on Facebook. At the latest Apple press conference I noticed that Steve Jobs even showed off the iPhone Facebook app on stage.

Let’s leave Halo 3 out of this, for now.

Yesterday Hugh Macleod wrote up his thoughts on Microsoft.

He puts out a theory that Microsoft would be more loved if it told a better story.

I’ve been studying my own reactions to Microsoft lately and I think it’s a lot deeper than that.

I have a REASON to love Microsoft. It propelled my career into a whole nother level. But lately even that hasn’t been enough.

I’ve been asking myself why?

To me it comes down to expectations. Microsoft is like the genius child who has rich and smart parents. Society holds huge expections for such people. If they don’t succeed the story is it’s a child who hasn’t lived up to his/her potential.

Microsoft is much the same way.

We see Google having fun with docs and spreadsheets.

We see Facebook and Plaxo and LinkedIn (not to mention Ning and Broadband Mechanics) having fun with social networking.

We see Flickr, Zooomr (one developer!), SmugMug, Photobucket, and a raft of others having fun with photography.

We see Apple having fun with all sorts of stuff.

We see Amazon having fun with datacenters.

And on, and on.

But where is the kid who has rich and smart parents? Yeah, Microsoft brought us the “Demo of the Year” last year: Photosynth. But what you didn’t read on TechCrunch is that it takes up to nine hours to process one set of images so, while it is a killer demo, it won’t be a product you and I can use anytime soon.

This week we learned that Google is struggling to stay relevant to the new conversation: one that was taken over this year by Facebook. But what is Microsoft doing to stay relevant? It’s like Microsoft has decided to go and spend the inheritance and not do any more work to stay on the bleeding edge. This is a much less interesting Microsoft than it was back in the 1990s, where it seemed every week Microsoft would announce something new and interesting. I remember being a subscriber to eWeek and other trade magazines and it was a rare week that Microsoft didn’t have the most important story. (TechMeme has taken over that role, and this summer how often have we seen Microsoft at the top of TechMeme? Not very often.

This week I learned another Microsoft employee is leaving to start his own company. This guy has asked me to keep it quiet until he can let all his managers know, but he’s someone who is liked and trusted both in Silicon Valley and up in Redmond. He’s a connector. An innovator. A guy who wants to SHIP innovative products.

These kinds of people keep leaving Microsoft because they see it isn’t living up to its potential and is frustrating to work inside of. It’s more fun to go join a small startup, or even one that’s fairly well along its path, like Facebook (everytime I go to Facebook I see more of the people I used to work with).

It’s been more than a year now since I left Microsoft. I really expected Ray Ozzie to come out and do lots of cool stuff for the Internet. But what did we get? A new design on live.com? Please.

The interesting thing is that Microsoft’s bench is so deep that even with the people they’ve lost over the years there still are huge numbers of amazing people working there and they still have advantages that no other company has. Deep, deep pockets. Massive numbers of customers. Profits that keep arriving everyday. A salesforce that’s well run and has its fingers in almost every country in the world.

So, back to Hugh’s post. Microsoft needs a new story. If I were on the management team I’d be looking hard at the Bungie team, the folks who brought us Halo 3.

What did they do right?

1. They stayed away from Microsoft’s politics. They work in a small ex-hardware store in Kirkland, Washington, USA. About 10 miles from the main campus.
2. They kept their own identity. They have their own security. No Microsoft signs outside. A very different feel internally (much more akin to Facebook than how the Office team works together). Each team works in open seating, focused around little pods where everyone can see everyone else and work with them.
3. They put their artists and designers front and center and obviously listen to them. The Windows team, however, fights with their artists and designers.
4. They keep the story up front and center. They work across the group to make sure they deliver that story everywhere. Translation: employees know what the story is, how to communicate it (or when not to), and they have great PR teams who work to make sure that story is shared with everyone.
5. The product thrills almost on every level. Hey, sounds like an iPhone!

The problem is that Bungie is a small exception in a sea of Microsoft.

Changing this company’s public story is going to prove very difficult. Maybe that’s why Hugh drew Microsoft a “Blue Monster” instead of something a little more friendly.

I’m sure some of my friends at Microsoft will misread this and think I’m “a hater.” You can think that if you want. It is intellectually lazy, though.

It’s interesting that since leaving Microsoft only Kevin Schofield (he’s one of the great connectors the company has over in Microsoft Research) has really done a good job of reaching out to me and tried to tell me a “new Microsoft” story.

One thing I did at Microsoft was reach out to the haters and see if I could tell them a new story.

So, I’m game. On Monday night I’ll be at the Halo 3 launch party. I’ll be looking to show my video camera a new Microsoft story.

But until I find it so far it just seems like that rich and smart kid who hasn’t lived up to the potential that we all see in her.

Am I missing something?

We were sitting in the hall in front of the Special Needs Nursery. Dave Winer, Patrick, and me. Dave and Patrick had their Macs open and were taking advantage of the free Wifi to blog and upload another picture (we were waiting for Milan cause Maryam and friends were visiting and we can only have a visitor or two into see him at one time).

Anyway, a group of surgeons walked by and one saw the Macs and said:

“Mac guys, I love it. Do you have the new iLife?”

Now THAT is what I call evangelism.

Dave turned to Patrick and said “that was a Silicon Valley moment.”

******

Another moment? We took off from the hospital for a little while and got lunch and then visited the Apple store. Patrick bought iWork (he already has Microsoft Office but says iWork is a lot better for his reports and such). Dave got a MacMini. At the Apple store two people recognized me. One was from New York. The other from Amsterdam. UPDATE: That’s them in the picture.

The Amsterdam visitor was Hans Veldhuizen, founder and president of Novatunes (he told us he’s building a new kind of music service that’ll be shipped later this year). He’s here to attend the TechCrunch 40 conference and saw Dave Twittering that he was in the Apple store (there’s a LOT more people Twittering than you might think). Stephanie Agresta is a consultant and told us she just joined forces with the Conversation Group. Small world, cause I know a few people involved in this new social media consultancy. Giovanni, one of the partners, is who introduced me and Podtech to Seagate. They are already doing work for SAP, so will be very interesting to watch and see how they get more companies involved in the social networks.

++++++

A moment in Milan’s life: I’ve been looking at all the technology used inside the nursery to monitor babies and such. The coolest thing I’ve seen so far is the ABM, or Auditory Brainstem Response test. Milan was asleep during his. Two little headphones play sounds into his ears and two electrodes on his head detected responses. He passed fine. but I just thought that was the coolest piece of tech. I’d love to meet the person/team who came up with this. Milan never even woke up for the test. Imagine if you were alive 100 years ago and took a time travel machine to today. Would you recognize anything in this world? Probably not.

Today Patrick and Dave were asking themselves what kind of computer Milan will have when he’s 13 years old (Patrick is 13, so is interested in such things).

I answered it’d have 4 terrabytes of RAM and 1,000 terrabytes of hard disk space. Patrick looked amazed and said something like there’s no way that such a computer would happen so quickly.

I told him that when he was born, back in January of 1994 the Web browser had barely been invented (Netscape incorporated that year) and that Windows 95 hadn’t yet shipped. The average computer back then had something like 16 megabytes of RAM (not gigs, megs) and a 40 megabyte hard drive (really cool computers had 32 megs of RAM and an 120 meg hard drive. I didn’t think we’d have a computer in our hands that would have a lot more memory than that and would be on the Internet 24/7 to boot.

What an amazing time to be alive. If we dream for a moment about 13 years from now, what do you see?

How about a mouse that works off of your brainwaves? How about a computer 10x more powerful than an iPhone that’s embedded onto your glasses? How about a petabyte hard drive? Or a printer that you could fit in your wallet so you could hand out pictures of your kids to friends who wanted them? I’ll be honest, I’m scared by the thought of embedding a computer into my body, but we’ll definitely see those. I’ve already met people who have RFID tags in their hands, which is mighty weird today but might become commonplace over the next decade or so. Imagine buying Starbucks just by waving your hand over the counter and not needing to carry credit cards. Oh, that’s another change that’s happened since Patrick is alive. Now almost every store and restaurant takes credit cards (at least in Silicon Valley). I remember when I got nasty stares at Starbucks for trying to use a credit card instead of paying cash.

+++++

A pile of gifts arrived yesterday from lots of my friends (both “real” and “online”). We really appreciate that and we’re going to make a donation in kind to help out kids less fortunate than us.

I’ve been thinking a lot about the “lottery of life” lately. Everytime I hear that damn helicopter come into the trauma center I think about the fact that someone is in a world of hurt while I’m the luckiest guy in the world.

On Wednesday, when we were in the testing center we encountered a pregnant woman who was sobbing, being consoled by her relatives. Obviously she had gotten some bad news of some kind. I can’t get her out of my mind. I’m so lucky. Patrick is such a great kid. Milan is so healthy and happy and wonderful and Maryam is just the best person I could wish for. Why did I get such a great family when she, obviously, got some really tragic news?

It’s so random, the lottery of life. A friend of mine knows an extremely rich woman up in Seattle. She has adopted a little girl from China. She told my friend “this little girl had to be abandoned to win the lottery.” I’ve been thinking about that, too. It’s so sad that there’s kids out there who aren’t loved the way Milan is being loved.

I’m thinking back to when I met Paul Singer, senior vice president and CIO at Target. He wears a pin that says “Adopt.” Great people make the kind of impression on you that last years, even though you only meet them once for a few minutes. I wish I was 1/10th the human being that Paul is.

Walking through the hospital and seeing the Packard name, along with tons of Silicon Valley famous people, on a wall remembering those who donated major money to build one of the world’s great teaching hospitals, it makes me remember what great leaders Silicon Valley has been fortunate to have pass through and there are no bigger than the Packards. They did things that make life better for all of us, both in times of need (hospitals) as well as places to take our kids (the Monterey Bay Aquarium, one of the world’s best, was started by their daughter).

I want to interview more of people like that: people who aren’t just out to make another dollar, but who are making the world a better place through their actions.

Do you know of someone like that in the tech industry? Give me a call or drop me an email (er, a Twitter, or a Facebook message). We need more tech industry moments like those.

I couldn’t sleep last night very well. 9/11 was playing in my head. It’s interesting, on the five previous anniversaries I didn’t give 9/11 much thought but with a baby on the way that day’s events are playing in my head in Technicolor.

It’s too bad that my blogs from that day are gone forever due to my own ineptitude. Translation: I didn’t back them up.

But, they do live on as memories. Not the good kind, either. The kind that are reserved for horrible events. Why does the human brain store those so well? I can play back the 1989 earthquake. The Shuttle crash. Elvis dying. Yosemite flooding. And 9/11 back over and over in HD in my brain.

Of the good events in my life my wedding and the birth of Patrick are the only ones stored in this kind of clarity in my head.

Speaking of Patrick, I remember letting him watch that morning’s events on CNN. I remember then thinking maybe I was being a bad parent. I’ve had that thought since then cause Patrick has been afraid of flying ever since then and has taken fewer risks than he might otherwise have done.

I remember thinking I wanted him to understand why his world was messed up. Why he needed to stand in sometimes hour-long security lines at airports. Why we were at war with Iraq. Why the economy of his world will be worse than it would have been otherwise.

9/11/01 was a different time. I’ve had four jobs since then (Userland, NEC, Microsoft, and now PodTech). I’ve moved four times. I was married to someone different. I have had four cars, one accident (which also is stored in my brain in HD). My mom was still alive. So was my grandma.

That was a world without Flickr. Without HD. Without YouTube. Without Ustream. Without Facebook. Without Google Reader. Without Wordpress. Without Twitter. Without Del.icio.us. Without iPhone.

I read Mark Cuban today and realize I, too, pinch myself every day and realize I have an ultra wonderful life. Especially after a day I had yesterday when I interviewed my good friend Shel Israel, two CEOs (including one who runs one of the world’s great processor companies), and someone named Zuckerberg. Almost all of it shared with my friend and producer Rocky Barbanica.

So much of our world has changed in six short years. Weird, I’m “J, J, J, J”ing through Google Reader’s feeds and just found Christopher Penn who already wrote most of what I’m writing here.

Sometime soon (real soon now) Maryam and I will bring a new life into the world.

It’s focusing my attention on what Penn asked: how do you improve the world?

Anyway, I’m off with Maryam to see her doctor. We’ll Twitter as soon as something changes.

Just wanted to say thank you to all the people who’ve made this life better, particularly the firefighters, the police officers, and those other people who serve to make the world a better place.

Heheh, I love these two posts.

Blindsquirrel.org (wants me to stop writing about Facebook): “I’m still a Scoble fan, but I’m hoping the subject changes once he takes on his most important role - the father of a new baby.”

Shel Israel (who is just discovering Facebook on his new iPhone): “I have never had a more productive business tool than Facebook is turning out to be. Never.”

That brings me to Techquilashots. He repeats something a lot of people have said without really understanding what I’m doing with Facebook: “But the problem Robert (and others with tons of friends — even if it’s 100) is that you don’t really care about the actions of all those people — and in FB apps, you really want to see the actions of certain top friends of yours.”

Totally untrue. I regularly just click around on my friends social graph. Not just the “big name” ones that I recognize. But especially the ones I don’t recognize. I want to know what connection we have and I want to discover new people before someone else does.

That’s the magic of Facebook and the fun of it.

Many people don’t understand what I’m doing with Facebook or the other social tools.

That’s OK, I hope they stay in the dark. Makes it more fun that way if people think I’m just looking at Kara Swisher’s profile.

Ever want to watch “Ask a Ninja” on your cell phone or iPhone?

I have tried to play videos like that on my cell phones. And it almost always sucks. Usually it can’t play. Or you can’t find it easily (not usually a problem with Ask a Ninja, but often is with other video shows).

On Monday Veveo is going to announce their new video search and play system called VTap. Here is an early look at how the service works.

I’ve been using this on my iPhone and it is pretty good. Demonstrates that companies can build some very compelling experiences even without much help from Apple.

What’s so cool about it?

It’s a search system that works pretty well.

But when you find a video show you want to watch (my show is in the search engine, for instance) and then you want to watch the show it does all the hard lifting for you.

If it’s not in the right format for your phone it converts it to the right format on the fly. This rocks because it makes video usable.

Anyway, this is one of those apps I find I’m using a lot on my iPhone. Here’s a sneak peak at the service. It won’t be up until Monday.

Danah Boyd writes that she’s she is “utterly confused by the ways in which the tech industry fetishizes Facebook”.

She asks some good questions and makes some good points. Lets go through them. My answers in italics.

1. “In an effort to curb spam, they killed off legitimate uses of mass messaging, silencing those well-intentioned users that adored them.” Totally true. It’s ridiculous that I can’t add more than 5,000 contacts. Even worse is the scalability of the platform they designed. Many of the apps I’ve been using lately simply don’t work if you have more than a couple hundred of contacts.

2. “But what I don’t understand is why so much of the tech crowd who lament Walled Gardens worship Facebook.” Because there isn’t anything better. It’s like why we are so gaga over the iPhone. The iPhone is locked up tight and doesn’t let us play. But it is so superior to the alternatives that we’ll put up with all the walls. I’ve seen this play out before, though. Remember in 1989? Apple had the Macintosh II and was way ahead of any other platform. They ended up with, what, five percent market share because a more open platform steamrolled over them. It’s why I watch Plaxo so closely and keep cheering them on.

3. Join a City network and your profile is far more open than you realize. Ahh, the walls aren’t high enough! Heheh. One of the first things I recommend people to learn on Facebook is how to use the privacy settings to adjust who has access to your stuff.

4. The default is far beyond friends-only and locking a FB profile down to friends-only takes dozens of clicks in numerous different locations. Totally true. For many people changing their privacy settings will take too much work. Facebook would be good to come up with some scenario-based choices. “I don’t want anything available to anyone.” “I’m cool with some of my stuff, but not my private stuff available to my friends.” Etc., etc. Personally, I’m on the other end of the scale “I don’t want any walls between me and anyone who wants to see me.” I guess that’s why I have a blog along with a Facebook profile.

5. if you install an App, you give the creator access to all of your profile data (no one reads those checkboxes anyhow). Yes, true. Be careful of those apps. On the other hand that’s what makes apps work well for me.

6. I can’t wait to see how a generation of college students feel about their FB profile appearing at the top of Google searches. That outta make them feel good about socializing there. Not. Yikes. Not that evil Google! Personally I love that you can find my stuff through Google (click that and you’ll see what my Facebook profile looks like to Google). And those college students will be very happy when employers start contacting them with career opportunities (or better).

7. Is [the over-30] crowd sustainable? Is it worth it monetarily? Is it affecting the college participation? Based on my discussions with people, yes, although she does identify that not everyone gets Facebook. Enough do, though, to make it a big business concern.

I think Danah is onto something, though. Facebook has a few huge holes:

1. The app platform rocks cause it’s the first time we’ve been able to see what our friends have loaded on their machines but it sucks lately because the new kind of apps (the ones that aren’t stupid games or gifts) rely on studying your social graph. Those kinds of apps generally aren’t scalable, rarely work, and generally break if you have more than a couple hundred of friends.

2) Privacy in Facebook is frustrating. For me I just want to turn it all off. So I notice the walls. For my friends who are newbies and who don’t want to be public? The settings are too hard to figure out and the nomenclature is difficult to understand. What’s a “network” anyway? Who does that apply to? There aren’t any examples and you only learn about those by spending a bunch of time inside Facebook learning about how it works. Danah’s right to point out this stuff is way too hard and doesn’t “thrill.”

3) I want per-content privacy. Flickr gets this right by letting me click a button on photos and setting the privacy for that photo.

4) The limit on # of friends? Ridiculous. Get rid of that. Or let me pay for a “pro” account without any limits. Buzz Bruggeman has tens of thousands of people in Microsoft Outlook. It’s not impossible to get that many contacts. If Facebook really wants to be the rolodex for the modern age it needs to get rid of those limits. Everytime someone wants to add me now it makes me pissed off at Facebook. It’s pissing me off hour of every day now.

Anyway, thanks to Danah for getting a conversation going. Tomorrow’s Data Sharing Summit should be a good place to discuss all this stuff.

Dave Winer wants a T-shirt.

Me, I’d like to let you keep the $100 per iPhone you so generously are going to give me and other early adopters who bought the iPhone.

Here’s what I’d like for my $300.

I’d like an iPhone where software developers can go to town and play.

I’d like an SDK. A real one. One where we can build apps that talk to the accelerometer in the iPhone. One where we can install apps like the very cool Google Maps or Yahoo Finance apps that are on the iPhone’s home screen.

I’d like Flash. SVG. Java. So software developers can build apps like my very cool Kyte.tv mobile app that lets me answer chat from my Nokia phone, or upload video.

I’d like you to turn on the camera so that I can record some video.

I’d like to buy some video games. Like those over on Kongregate.

I think that’s all worth $100 per iPhone. I’d rather have all these things than have a gift certificate.

Thank you. But since I don’t have any of this stuff I’ll take the $100.

You think you got it bad cause the iPhone dropped in price by $200? My family has bought three of them so far. Well, four, if you include Patrick’s mom, who just bought one a week ago. She’ll be able to get her $200 back, but the rest of us have paid an early-adopter-tax of $600.

My first response? This is nothing new.

I remember when Steve Wozniak showed me his new die-sublimation printer back in 1990. It cost him $40,000. Today a $70 printer does a better job.

This “reduce the pricing” trend is one of the reasons I LOVE this industry.

Seagate, today, just brought out new hard drives. More capacity. More features. Lower price.

Am I bummed that I spent $2,000 on my first 20 megabyte hard drive when today a $400 model is a terabyte? No. I’m happy!

I celebrate anytime our industry drops prices. It brings more people into what we’re doing.

That said, Terrence Russell in Wired talks about the four mistakes Apple made with the price drop. He makes some good points.

But, I’m cool with paying a high price to be first. I’ll be first in line for the next great innovation too.

I guess I should complain that my $4,000 HDTV now costs about $2,000 after a year and a half. Or that our new cars are only worth half what we paid for them. Or that gas prices are going up (I wish THAT industry worked the same way that the tech industry worked).

Actually, if I had something to be unhappy about it’d match the questions that PodCasting News asked of Apple.

UDPATE: Apple, er, Steve Jobs, just announced that we’ll get a $100 gift certificate for each iPhone purchased before the price drop. That’s awesome.

Patrick Scoble just texted me this: “LMFAO Steve showed off the facebook app on the itouch.”

First things first. I gotta talk to Patrick about his language. I’m sure he’ll come up with an inventful response for what “F” stands for in his message.

Anyway, why is he laughing? Because when I got a chance to meet Steve Jobs after the last press conference I asked Steve “are you on Facebook?”

He looked at me strange and answered “no.”

I guess Joe Hewitt’s app converted him. (It still is my favorite app on the iPhone).

Anyway, that’s Patrick’s first reaction to what was announced today. I’m sure there’s more coming. I’m texting him back saying “was being the first kid in school with an iPhone worth $200?”